Law and Order Matters: Inner City Retailers Close Doors and Head for the Hills

I don't know a lot about the grocery business, but it's my understanding that the margins are thin. This story about Target crossed through my inbox at the same time as I heard people talking about Chicago discussing the opening of a government run grocery store because six grocery stores have fled the South and West sides over the past two years:

Stocktwits Daily Rip
26 September 2023
Big-box retailer Target continued its precipitous decline today after becoming the latest company to close some stores due to violence and theft. 

The company said it will close nine of its nearly 2,000 U.S. stores after struggling to control crime and safety at those locations. The impacted cities include New York City, Seattle, San Francisco, and Portland. 

In a news release, it said, “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.” Interestingly, unlike other retailers who have closed stores, Target explicitly called out retail crime as its primary reason for the decision. 

During its second-quarter earnings in mid-May, CEO Brian Cornell said organized retail crime had risen in its stores and that overall shrink would impact full-year profitability by more than $500 million. He also reiterated back then that the company did not want to close stores. But evidently, the problem has become bad enough to close at least these nine stores and likely review others.

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Crain's Chicago Business

Supermarket closings are the latest blow to South and West side neighborhoods
The closing of three South Side Walmart stores in the spring disheartened residents who already face limited options for fresh produce, meat and pharmacy goods. It was the latest blow to neighborhoods that earlier had lost two Target stores and, more recently, the Whole Foods in Englewood.

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Fox News
17 September 2023
Chicago mayor considers creating city-owned grocery store after Walmart, Whole Foods close stores in the city

Chicago is exploring a city-owned grocery store after several closed in the past year citing millions in annual losses

The mayor’s office said that "Historic disinvestment has led to inequitable access to food retail across Chicago, and these existing inequities have been exacerbated as at least six grocery stores closed on the South and West sides over the past two years."

Message to Chicago: Fix the crime problem and you will have grocery stores.

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San Francisco Retail Scene
According to the San Francisco Standard, over 39 retail stores have shuttered in San Francisco's Union Square area since 2020. This represents a significant decline in the number of brick-and-mortar stores in the city's downtown shopping district.

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When protesters shout DEFUND THE POLICE, one has to wonder how that will motivate retailers and grocers to remain in these neighborhoods. Shoppers like to feel safe, and businesses need to make money in order to pay their staff. In fact, employees need to feel safe as well. No one should have to put their life on the line in order to get a paycheck.

Anybody want to recommend solutions? Leave your comments below.