Dollar Stores Planning To Lock Up Their Merchandise

August 25, 2019 Pleasanton / CA / USA - Dollar Tree store entrance; Dollar Tree Stores, Inc., is an American chain of discount variety stores that sells items for $1 or less

( – Theft continues to be an issue at retailers across the country. Not even Dollar Tree, where most merchandise is $1.25, is immune from the problem. The store CEO recently told analysts that the company will begin rolling out an aggressive strategy to tackle the problem.

On August 24, CEO Richard Dreiling held a call detailing the plan to combat “shrink.” The word describes inventory that’s missing due to theft or other issues. According to reports, he said the company is taking “a very defensive approach to shrink.” He explained there’d been a larger inventory loss than the company anticipated.

Dollar Tree Inc. owns both Family Dollar and Dollar Tree. In the second quarter of 2022, the company’s gross profit margins dropped from 32.7% in the second quarter of last year to 29.8% in the second quarter of 2023. Chief Financial Officer Jeffrey Davis blamed the profit losses on shrinkage.

Dreiling said the company intended to roll out its plan in the final two quarters of the year. Stores are planning to move some products behind the checkout counter and lock others up. The CEO explained that the theft is so bad that they’ve reached a point where they will have to discontinue certain items.

Other companies are also taking steps to prevent theft. Jill Timm, Kohl’s CFO, recently blamed shrinkage for reducing profit margins at that retail chain, as well. She said the company has taken new approaches to prevent theft, like using cables to secure products. It has also increased the number of employees in the fitting room areas and near the front doors.

Other stores, like Walgreens, CVS, and Walmart, also lock up goods that are often stolen, like formula and hair care products. At the end of 2022, on CNBC’s “Squawk Box,” Doug McMillon, Walmart’s CEO, said theft was a serious issue facing retailers and was “higher than what it has historically been.” He warned customers that they could see higher prices and that stores could close in high-theft areas. The retail giant followed through, closing several locations in cities like Washington, DC, and elsewhere.

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