Sat. Apr 20th, 2024

In the coming weeks, a Giant Food market in D.C. will clear its beauty and health aisles of all national labels. No more Tide, Colgate or Advil, only store brands. Shoppers also will have to present their receipts to an employee before exiting the store.

It’s the regional supermarket chain’s most overt gambit against the rampant theft that’s plaguing retailers of all sizes. It’s also a potential last-ditch effort to avoid shutting down the unprofitable store on Alabama Avenue SE — the only major grocer east of the Anacostia River in Ward 8.

“We want to continue to be able to serve the community, but we can’t do so at the level of significant loss or risk to our associates that we have today,” said Giant President Ira Kress.

Shoplifting, organized crime and violence have become significant concerns for regional and national retailers. Home Depot, Target, Lowe’s, Dollar Tree, Dick’s Sporting Goods and Ulta are among those that flagged shrink — the depletion of inventory caused by something other than sales — during their second-quarter earnings calls. Growing losses have spurred giants such as Walmart to shutter locations.

“Our team continues to face an unacceptable amount of retail theft and organized retail crime,” Target chief executive Brian Cornell told investors last month. “During the first five months of this year, our stores saw a 120 percent increase in theft incidents involving violence or threats of violence.”

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In recent months, stores across the country have been targeted by flash-mob robberies, after-hours break-ins and thefts mid-supply chain. Several Target locations grappled with bomb threats and swatting incidents in the fallout from participating in Pride Month.

Incidents of organized retail crime increased in 2021 by an average of 26.5 percent, according to a National Retail Federation study released last year. Store owners, the report says, blamed organized retail crime for about half of the $94.5 billion lost that year to retail shrink.

That’s spurred retailers like Dollar Tree to take “a very defensive approach to shrink,” according to chief executive Richard Dreiling. The chain recorded a 30 percent decline in gross profit margin last quarter, largely because of shrink. Now more items will be locked up, moved behind counters or simply discontinued.

In downtown Chicago, Walgreens introduced a new anti-theft store with just two aisles of “low-value” products such as Band-Aids, snacks and batteries, while the rest is kept behind a counter and must be ordered digitally.

Grocers like Giant run on slim profit margins, so higher costs for operations, labor and rent can create outsize pressure. This has forced some retailers to shut down stores in large urban centers. Before closing its downtown San Francisco location, Whole Foods placed fliers on shelves instructing customers to find a team member to retrieve alcohol, supplements and other high-value merchandise such as manuka honey from the back, a former manager told The Washington Post.

(Whole Foods’ parent company, Amazon, was founded by Jeff Bezos, who owns The Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)

Giant Food, which has 165 supermarkets across D.C., Delaware, Maryland and Virginia, has not closed any stores. In May, it implemented several changes, including hiring more security guards, closing down secondary entrances, limiting the number of items permitted through self-checkout areas, removing high-theft items from shelves and locking up more products.

D.C. Council member fears for the future of Ward 8’s only grocery store

“At this particular store, it’s actually worse, not better,” Kress said of the shrink. “And we’ve invested a significant amount of money here, even more security here than any other store.”

This meant more changes were needed, Kress said. Giant’s Alabama Avenue store will soon remove high-theft merchandise such as Tide laundry detergent, Schick razor blades, Dove soap, Degree deodorant and Pantene shampoo to curb losses.

“We have no other choice,” Diane Hicks, senior vice president of operations, said Thursday during a walk-through with officials from the D.C. mayor’s office, the city’s police and fire departments, and the Chamber of Commerce. She added that other nearby stores have locked up all products in those aisles or removed them altogether. “I’ve been leaving it out for our customers, and unfortunately it just forces all the crime to come to us.”

Those products are easy to steal or have higher resale values, Kress said. Instead, customers can buy Giant’s private label CareOne, which has a low resale value.

“I don’t want to do this — I’d like to sell [those products],” he said. “But the reality is that Tide is not a profitable item in this store. . . . In many instances, people stock the product and within two hours it’s gone, so it’s not on the shelf anyway.”

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Some D.C. Council members have expressed concern that Giant might shut down a store that serves a ward of more than 85,000 people. Not only is a supermarket like Giant an important part of the community, it also is a lifeline for a community with limited access to quality food.

Theft and violence is an issue in the area around the store, said Lindsey Appiah, deputy mayor for public safety and justice, who was among the officials touring the store on Thursday. But having access to a grocery store is “important for public health purposes,” so her office plans to work with Giant to find solutions.

“Part of what we’re trying to do is creating thriving communities,” she said. “We certainly don’t want to lose a hub for that community, and we don’t want people to suffer needlessly for the actions of those who are a small minority who are causing so much of this disruption.”

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