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A rise in theft could cause some Walmarts to close their doors and increase prices, according to Walmart CEO Doug McMillon.
“Theft is an issue. It’s higher than what it has historically been,” McMillon said Tuesday on CNBC’s finance show Squawk Box.
“We’ve got safety measures, security measures that we’ve put in place by store location. I think local law enforcement being staffed and being a good partner is part of that equation, and that’s normally how we approach it,” he added, saying shoplifting is primarily a city-by-city issue.
However, McMillon also warned that if shoplifting levels do not decrease, store prices will increase, and in some cases, stores could be forced to close their doors.
Walmart employs 1.7 million people in the United States and 2.3 million worldwide, according to its website. Locations can be found in all 50 states, as well as Puerto Rico. The company also owns and operates Sam’s Club wholesale stores as well.
Walmart (WMT) is not the only retailer to see an increase in shoplifting that has impacted the company’s bottom line however, In November, Walmart’s rival Target (TGT) also reported large losses due to shoplifting and organized theft.
During a quarterly earnings call, Target Chief Executive Brian Cornell revealed that Target and other retailers have seen increases in theft and organized retail crime across their businesses. The Wall Street Journal reported that Target executives blamed criminal networks for the thefts and inventory loss, a total of $600 million in gross revenue loss.
Chief Financial Officer Michael Fiddelke also said at the time that theft, mostly organized attacks and not petty crimes, led to a 50% fall in profits year over year.
Despite also dealing with theft and warning of the impact it may have, Walmart has still had a more positive financial outlook, announcing in November that revenue was up 8.7% in the third quarter at $152.8 billion.
“We had a good quarter with strong top-line growth globally led by Walmart and Sam’s Club U.S.,” McMillon said in a statement to employees. “We significantly improved our inventory position in Q3, and we’ll continue to make progress as we end the year.”
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