Walmart Cracking Down On Theft Because It Doesn’t Want To Lose Billions Of Dollars A Year

(JeepersMedia)

When something is costing billions of dollars a year in lost revenue, you’re probably going to start paying attention and try to stop the leakage. That’s why Walmart is addressing a big problem at its 4,555 stores in the U.S. — shoplifting and other forms of “unknown shrinkage” that is causing the company to lose about $3 billion per year.

Greg Foran, head of Walmart’s U.S. operations, told the media that he put theft and other factors (pants walking out on their own?) to a list of urgent items that the company is going to tackle at its stores, reports Reuters.

He says that while the problem isn’t necessarily growing, cutting down on losses in that area could boost margins, as theft usually represents about 1% for any retailer’s sales. With nearly $300 billion in revenues in the U.S. in the past fiscal year, that adds up.

“One percent of $300 billion is quite a lot of money. If you can save 10 basis points of it – boy I’ll take it every day of the week and put it into lower prices for customers,” Foran told Reuters (10 basis points would be equal to $30 million).

As for that mysterious category of “unknown shrinkage,” that could mean simple mistakes in inventory record-keeping, as well as theft by customers or workers.

Foran says the problem isn’t necessarily growing, but he decided to focus on it with the hopes of boosting profit margins.

Wal-Mart’s U.S. chief takes aim at urgent item: theft [Reuters]

by Mary Beth Quirk via Consumerist