Investors Aren’t Pricing in this Factor
It’s election season coming up and one can expect a lot of turmoil in the streets, unusual shopping habits and lots of polarized activity on media sites. Expect riots, political marches and unfortunately, violence. However, there is one factor that’s become the norm in US cities regardless of an election. Theft.
San Fransisco and other cities have made is legal (in essence) to steal 950 USD and less of merchandise without facing a meaningful penalty. Why is anyone shocked that this could promote theft in these communities? According to a YouGov poll done in late January of this year, 46% of Americans think shoplifting is a “very serous problem” in the country.
I was talking with a friend from Mexico and I asked him “what would happen if I ran out of a store with hundreds of dollars of inventory?”. His reply, “Ahh, I don’t know I think somebody would hurt you, security guard or someone else would beat you up, it could be bad” In Mexico, you get an ass whopping. While in these same cities those employees who have previously intervened to stop theft, were fired! I mention Mexico because this is a country not exactly known for their civil behaviour…
It’s gotten so bad some stores have all the items locked down so you cannot steal them. I recall one story where someone wanting shaving razors and toothpaste had to go to the front counter who went back into their inventory room to go get it–like renting a movie back in the day where you hand them the paper slip and they go back to give you the actual movie.
Target Corp. predicts an unbelievable $500M MORE in losses compared to last year for the remainder of 2023. How much did they lose in 2022? $663,000,000 dollars
Wal-Mart is at the stage of closing stores. Four stores have been closed in low-income neighborhoods throughout Chicago this year with Wal-Mart stating: “the stores simply aren’t profitable due to a combination of our sales, product margin and expenses. We lose tens of millions of dollars a year”. Of Wal-mart’s planned closures for the year, over a third of them are in Illinois. Of these neighbourhoods, 15,800 accounts of theft have been reported with only 7% leading to arrests. The result for Wal-mart packing up and leaving? ‘Evidence of Corporate racism!!'<–Isn’t everything?
Projections from Capital One suggest that Newton’s first law is right–Trends that start in motion, tend to stay in motion [unless stopped!].
Their data goes on to highlight their expectation that this problem will worsen
- Over 74% of retail stores have reported an increase in theft from customers in the last 5 years, whereas 24% note this increase in the last 5 years from employees.
- Over 9% of Americans admit to regular shoplifting
- 38% of retailers noted an increase in return fraud in the last 5 years.
- Over 8.7B dollars of potential tax revenue is lost due to theft (while I’m not sympathetic to the politicians, this will only result in tax increases for law-abiding citizens).
- The US States with the lowest amount (ranked) of theft per capita are 1) Wyoming 2) Alaska 3) Vermont 4) North Dakota 4) Rhode Island 6) Delaware/South Dakota tie
- The US States with the highest amount (ranked) of theft per capita are 1) California (exactly 49X more than Wyoming) 2) Texas 3) Florida 4) New York 5) Illinois 6) Pennsylvania
[Update! I found this after I wrote it. It turns out that in California, if you go to stop stealing, it could be a fine of up to 18,000 USD. Tell me the culture is fucked in one policy…]
UseWebsite Policies & it feels like you’re stealing!!
https://www.websitepolicies.com/pricing?in=809
The point I wish to hammer home is that while I realize this is just another series of data charts (to complement the hundreds you’re normally reviewing) these thefts are not likely to stop.
A reduced quality in the standard of living due to inflation, higher interest rates, Covid-hangovers, unemployment and all debts are likely to worsen–but even if they didn’t & the economy roared, I believe a missed point for investors is the toxic culture within the United States. The culture of one who forfeits personal responsibility, expects goods and services to come their way, does not have to provide and one that the government will take care of you. Going back to that YouGov poll, 14% of Americans think that it’s either always acceptable to steal in stores, they’re not sure or they preferred to not answer.
Even the reports of crime by the CEOs are not even deemed theft, rather they are called “Shrink”. “Did you get robbed? –No, I shrunk”.
One third of the employees under these same CEOs also believe it’s not necessary to intervene in shoplifting if the criminal does not have a weapon–further highlighting the detachment between the employee and the workplace (It’s not my store so…)
Spending any time on the internet you will find that theft, in some sense, is normal in the United States. So much so that the suits running these large companies are debauching the language to soften criminality figures, all while the moral compass is drifting amiss. When someone takes action against thieves to hear, “What the hell do you mean I can’t just take it? Are you racist or something?” and they’re in the wrong… –expect a bigger number on the “Cost of Goods Sold” slot on the income statement of retail.
#StayOnTheBall
