A Walgreens storefront in San Francisco in 2006. Walgreens says it will close five more stores in San Francisco next month because of organized retail theft. The drugstore chain has closed at least 10 stores in the city since the start of 2019.Ben Margot/The Associated Press
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
U.S. drugstore giant Walgreens WBA-Q says its new concept store in Chicago is designed to be more convenient for customers and has nothing to do with theft rates, even though it severely restricts direct access to merchandise. Some shoppers say the design treats everyone who enters the store as a potential criminal.
It may be both – or neither. The controversial experiment in the city’s crime-plagued South Loop neighbourhood has only two aisles open for unsupervised browsing of low-ticket items and holds the bulk of merchandise behind staffed counters and in locked cabinets. All customers must pass through metal detectors, and are directed to kiosks to shop for high-value products digitally.
Sadly, whatever the view, the chain’s big bet is the sort of reality-based innovation emerging among retailers seeking to survive as law and order breaks down in many American cities.
More troubling, concepts like the new Walgreens store mark a further shift in responsibility for managing criminal behaviour to the corporate world from government. Increasingly, companies, particularly retailers, are tasked with making sure law-abiding customers can still get essential services – such as access to pharmacies – without being victimized by bad apples. That’s particularly true in under-resourced communities, where access and mobility are often challenging.
The problem is, dealing with crime is not Walgreens’ job or the job of the private sector in general. It’s the government’s job, and that’s why we pay taxes to fund law enforcement. It is, however, becoming more evident that it has to be Walgreens’ job, as social and political dynamics redefine what constitutes civilized society.
This is not an issue specific to a single company or a single neighbourhood. Theft and violence against retail employees – and even customers – have risen sharply in Chicago, New York, San Francisco, Los Angeles, Seattle and other cities. The main culprits: roving bands of marauders whose smash-and-grab methods make up a new commercial threat called organized retail crime.
So prevalent is the problem that many retailers have pulled out of troubled urban neighbourhoods after efforts to improve store security using advanced electronic surveillance, product monitoring and more security guards has failed.
The list of departures is the longest in San Francisco. Old Navy recently said it would close its flagship Market Square location after three decades because of losses and concerns about employee safety. The clothier’s move follows closings by T-Mobile TMUS-Q, Whole Foods, Nordstrom JWN-N, Office Depot ODP-Q, Starbucks SBUX-Q and Anthropologie, among others. Target and others are restricting nighttime hours at downtown stores for security reasons.
Some blame the pandemic for the lawlessness, suggesting the hard economic times experienced by many prompted the wave. Others blame restrictions on the thinning ranks of law enforcement, as well as lax laws governing theft, particularly in Democrat-led cities and states. California, for example, downgraded theft under US$950 from a felony to a misdemeanour, and eased bail conditions, making criminal behaviour virtually consequence-free.
Whatever has fuelled the trend, the new Walgreens concept is the all-but-inevitable reaction. And while the slogan of the new store format seems friendly, it is another bit of misplaced marketing sunshine that comes off to some as disingenuous, urging customers to “Let us do the shopping.” What it really means, some South Loop customers say, is let us do the shopping so you don’t shoplift.
Walgreens management has made a big deal about the impact of theft on its financials. A year ago, the company told investors theft was a real issue because of retail crime rings. Recently, chief financial officer James Kehoe softened his view, suggesting that while theft was still a problem, the company may have “cried too much” about it. It’s no coincidence his remarks came as the South Loop store was being launched.
To be sure, the risk for Walgreens is in alienating customers in an effort to reduce the cost of theft. Win or lose, the company deserves some credit. For all the bad press companies get about putting performance ahead of people, this is one example of how a company is finding new ways to manage the unpleasant reality of modern urban life and serve its communities, particularly those that are under-resourced.
Does Walgreens need to take such a hard line? Based on recent history, probably.
The nuclear option is for Walgreens to do what so many retailers have done – pull out all together. If the company did that, the South Loop neighbourhood would be left without an important source of essential services. That doesn’t seem like a people-first option at all.