How is Best Buy winning the war against retail theft?

• Target, Walmart, Dick’s, and other major retailers have all raised alarms about the rise in retail theft.
• But Best Buy said Tuesday that theft in its stores has remained relatively stable.
• The CEO attributed this in part to stores having only one entrance and few self-checkouts.

Target, Walmart, Dick’s Sporting Goods, and other major retailers have all raised alarms over the past year about rising rates of retail theft.

But Best Buy said on Tuesday that the rate of shrinkage – or losses due to theft, fraud or other causes – has remained relatively stable over the past few years.

And in certain parts of the country, the company is “definitely seeing an increase” in burglaries and thieves are “just grabbing” merchandise and “running out,” Best Buy CEO Cory Barry said Tuesday on a call with analysts. But she said the contraction as a percentage of Best Buy’s total revenue is close to what it was before the pandemic.

By comparison, Target recently said the downsizing is on track to cost the company $1.2 billion in 2023, up from $500 million last year. Dick last week blamed rising theft rates, in part, for a 23% drop in quarterly earnings. Walmart’s CEO said stores would close if theft didn’t slow, and Dollar Tree said in May it was considering closing more merchandise to prevent theft.

On Tuesday’s call, Barry offered a list of strategies that she said helped Best Buy combat theft.

Best Buy employs security personnel at store entrances

Barry said Best Buy has dedicated asset protection personnel at its front doors. These are employees who have been specially trained to deal with security threats, such as theft.

Notably, Costco, which also employs employees at the entrances and exits of its stores, said in May that it had not seen any significant spikes in deflation.

Barry added that Best Buy “often” has more “floor coverage” than other retailers — which means more employees on the sales floor.

“We have more employees in our stores and they do an exceptional job of monitoring our stores,” she said.

Best Buy stores have one entrance and a few self-checkout registers

Barry highlighted other features of Best Buy stores as a way to prevent theft.

“We usually only have one entrance in our stores, we tend to have less self-checkouts, and we have a very high digital penetration of 33%,” she said, referring to the share of sales done online versus in-store.

Fewer entrances mean fewer options for thieves to escape with stolen goods carts. Self-propulsion is often blamed as a driver for theft.

Matt Kelly, a loss prevention expert at security solutions company LiveView Technologies, told Insider last year that self-checkouts can save labor, “but that by its very nature means there will be less interest in the transaction. And there will be more than one chance for dishonest people to be dishonest.” Trustees.”

Costco CFO Richard Gallante said in May that the warehouse chain saw an uptick in contraction after rolling out self-checkout records three years ago, though he said rates have since returned to normal.

Best Buy is closing some merchandise

Barry said Best Buy has begun removing some items from its sales floor that could be prime targets for thieves.

The company has invested in in-store displays and digital tools that allow customers to scan items to receive them within minutes. She said this “allows for a much better merchandising experience for products that we considered to be more at risk of shrinkage and decided to keep inventory in a safer location off the sales floor.”

More broadly, she said, Best Buy has maintained control over theft because it has been a focus of the company for years.

“Due to the high-priced nature of what we sell, we have dealt with downsizing aggressively for many years,” she said. “It’s really an integral part of the culture.”