Dollar Tree and Family Dollar deploy new anti-theft measures
Other corporations including Walmart and Target have recently sounded the alarm about shoplifting and coordinated retail theft.
On Thursday, Dollar Tree Inc.'s CEO announced that the company is implementing a "very defensive approach" to counteract shoplifting.
Overseeing both Dollar Tree and Family Dollar chains, the company aims to deploy "several new shrink formats" during the upcoming six months, as shared by CEO Rick Dreiling in the morning. In the retail sector, "shrink" commonly denotes theft and assorted inventory reductions, Fox Business reports.
"It goes everything from moving certain SKUs [stock-keeping units] to behind the check stand," he explained to those who listened into the company’s earnings call. "It has to do with some cases being locked up. And even to the point where we have some stores that can’t keep a certain SKU on the shelf just discontinuing the item."
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Dollar Tree identified shrink as a contributing factor to its gross margin decline. The figure stood at 29.2% for the second quarter, reflecting a decrease of 220 basis points compared to the previous year.
The company stated that the "lower initial mark-on, unfavorable sales mix … and wage investments in distribution center payroll" also played a role.
CFO Jeff Davis noted at one point that shrink "is a sort of a trailing indication because stores are shrinking over the course of the year," adding it "takes time" for measures to "actually take hold."
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During the previous quarter's earnings call, the retailer also highlighted shrink as a challenge they were encountering.
Comments from Dollar Tree Inc. executives on Thursday morning followed remarks made just a day prior by Kohl’s CFO Jill Timm. She labeled shrink as a persistent "retail industry problem" and mentioned it had "weighed in on our margins." Similarly to Dollar Tree, she detailed some of the steps Kohl’s is implementing to tackle the issue.
Recently, other corporations including Walmart and Target have sounded the alarm about shoplifting and coordinated retail theft.
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