Top Rite Aid executives bemoaned a widespread shoplifting problem in New York after the retailer reported worse-than-expected quarterly results on Thursday.
Rite Aid CEO Heyward Donigan told analysts the company “experienced some unexpected headwinds this quarter, particularly in our New York City stores.”
Donigan noted that the company has begun “shrinking our footprint” in New York as it moves forward with plans to close dozens of low-profit stores.
The company said a $5 million year-over-year increase in “shrinkage,” a term in the retail industry that refers to losses related to theft, fraud or administrative errors, reduced earnings. Andre Persaud, Rite Aid’s CEO of retail, expanded on the issue — saying that losses in the NYC area from shoplifting have worsened despite the company’s efforts to improve “product protection.”
“I think the headline here, especially the environment we’re operating in in New York, is not conducive to downsizing based on everything you read and see on social media and the news around town,” Persaud said.
Rite Aid’s website lists a total of 318 stores in New York State, including 27 in Manhattan, 34 in Brooklyn and 18 in the Bronx. The chain of pharmacies operates in about 2,300 locations in the United States.
“(We’re) seeing higher levels of brazen shoplifting and organized retail crime, and we’re taking an active role in helping police pursue shoplifters,” a Rite Aid spokeswoman told The Post on Friday.
“Our organized retail crime team partners with local police departments to mitigate this criminal activity and assist in arrests, and actively works with multiple New York City district attorneys’ offices to address repeat theft cases,” he said.
The latest statistics from the NYPD show a 42.4% increase in petty theft this year compared to 2021. Thefts are up over 37% and thefts are up over 32%.
Persaud said Rite Aid could put everything behind lock and key in neighborhoods where retail theft affects the store’s bottom line, as well as test pharmacy-only store formats.
“We try to put everything behind the display cases to ensure that the product is there for the customers who want to buy it,” added Persaud. “And eventually we even had to use off-duty police officers in some of our stores, even in some of these communities.”
Rite Aid shares fell as much as 29% in Thursday trading after the retailer’s dismal second-quarter results.
The company reported a net loss of $331.3 million, or $6.07 per share. Revenue fell to $5.9 billion, down $6.11 billion from the same period a year ago.
Rite Aid said the revenue decline was “primarily due to lower revenue from COVID vaccines and testing, store closings and planned loss of life at Elixir.”
Retail inventory is down about 66% this year.
As The Post reports, New York’s Rite Aid stores have been bombarded with theft this year — with thieves quietly taking items off the shelves in front of cameras.
For example, the Rite Aid at the corner of Eighth Avenue and 50th Street in Hell’s Kitchen lost more than $200,000 in stolen merchandise in just two months. The store closed in February.
“They come in every day, sometimes twice a day, with laundry bags and just load things up,” one store employee told The Post about the Rite Aid thieves.
Critics accused District Attorney Alvin Bragg of supporting bail reform plans, which they said contributed to the problem.
Security guards working at high-end stores in New York’s bustling West Village and SoHo told The Post they feel powerless to stop thieves who rob stores without fear of retribution.
Major retailers have been reporting an increase in thefts at their stores for more than a year. The National Retail Federation said “shrinkage” could cost retailers $94.5 billion in 2021 alone and warned of a rise in “organized retail crime,” or ORC.
“The drivers of retail sales have multiplied in recent years, and ORC is a growing threat to the retail industry,” Mark Mathews, NRF’s vice president of Research Development and Industry Analysis, said in a statement.
Companies like Home Depot and Best Buy have resorted to locking items in their stores to prevent theft. In November 2021, Best Buy CEO Corie Barry said the increase in shoplifting was having a “traumatic” effect on staff and hurting the company’s bottom line.
Midwest grocery chain Hy-Vee introduced an armed “retail security team” late last year to protect its shoppers and merchandise. Wegman’s was recently forced to take down its self-checkout app due to shoplifting concerns.