There are a few reasons why Target is closing stores. One reason is that the company is shifting its focus to smaller-format stores and e-commerce. In recent years, Target has opened a number of smaller, more urban stores, which are performing better than its traditional big-box stores. The company is also investing heavily in its e-commerce business, which grew by 20% in 2022.
Another reason for the store closures is that Target is facing increased competition from other retailers, such as Walmart and Amazon. These retailers are also shifting their focus to smaller-format stores and e-commerce, which is putting pressure on Target’s traditional business model.
However the biggest reason for the recent store closures in New York, Washington, Oregon, and California, stems from the increase in shoplifting and organized retail theft in recent months. In May, Target projected to lose $500 million a year to violent shoplifters, combine this with a $700 million inventory shrinkage, they are now looking at a total lost of $1.2 billion.
Target did release a statement saying:
“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,”. “We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all.”
Many speculate that it is the lax enforcement of the law by the cities and/or the DAs, or even the unwillingness of Target to pursue legal action, which is the driving cause for the continued theft in these locations.
Target’s stock price has continued to fall over the last 6 months, losing 31% of it’s value or $50. So far the future doesn’t look that great as Target still is suffering from public backlash for it’s recent round of closures and other political controversy. One can only wait and see what the next quarterly reports have in store for them and if these closures in high theft areas are enough to stop the continued loses.