Walgreens’ Claims About ‘Organized Retail Crime’ Just Don’t Add Up

Updated: Oct 20, 2021 13:29
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When news broke last week that Walgreens was closing five SF stores, they claimed it was because of “organized retail crime.” Several national publications for some reason made a huge deal out of five measly San Francisco Walgreens closures, even though these newspapers are located 3,000 miles away. The New York Post declared that SF stores are “besieged by rampant shoplifting and lax enforcement,” and the Wall Street Journal called it “San Francisco’s Drug Store Anarchy.”

Funny, these newspapers did not report when Walgreens closed 16 stores in their own town of New York City just seven months ago, but they think these five San Francisco Walgreens closing is worse than Manson being let out of prison. And it’s odd that Walgreens has had to close stores, but meanwhile CVS  has not closed one single San Francisco store. So it’s fair to wonder… is Walgreens really suffering from a shoplifting epidemic, or is the company having other structural problems and concealing these with a “Blame Chesa Boudin” excuse-making? 

There is certainly some sort of organized shoplifting ring in San Francisco. On any daylight hours trip to the 24th Street BART station in the Mission, you will encounter at least half a dozen makeshift vendors selling unused retail items that clearly, ummm, “fell off a truck.” So yes, this is to some degree organized, and these street vendors are a relatively new phenomenon.

The above June tweet from KGO’s Lyanne Melendez, the all-time most Liked and retweeted tweet mentioning Chesa Boudin, threw gasoline and a lit match on this discourse. But there are a few fishy things about this video, aside from the obvious, astonishing bias of a newsroom anchor hashgtagging #NoConsequences and @-ing Chesa Boudin. 

Like, why is the security guard just passively recording this? Why did he let a guy bring his bike into the store in the first place? I shop at Safeway every day, and I’ve seen the security guard break into a run chasing a suspect pretty frequently. I’ve had the security guard ask to see my receipt many times to prove I had bought what was in my bag. This Walgreens security guard is intentionally being useless. Is there a reason that a Walgreens security guard is intentionally being useless, compared to industry standard practices?

The Chronicle actually looked at reported shoplifting data from these five SF Walgreens stores, and found it was quite minor. “One of the stores set to close, on Ocean Avenue, had only seven reported shoplifting incidents this year and a total of 23 since 2018, the data showed,” the Chron reports. “While not all shoplifting incidents are reported to police, the five stores slated to close had fewer than two recorded shoplifting incidents a month on average since 2018.”

Mayor London Breed also expressed skepticism about the whole shoplifting rationale, considering that Walgreens had announced in 2019 they were closing 200 stores nationwide, as they were saturated with too many stores after their 2015 acquisition of rival chain Rite Aid.

As Breed told KPIX last week, “They are saying [shoplifting is] the primary reason, but I also think when a place is not generating revenue, and when they’re saturated — S.F. has a lot of Walgreens locations all over the city — so I do think that there are other factors that come into play.”

Breed has an excellent point. What the out-of-town media does not realize is that the closing Walgreens at Mission and Cesar Chavez, for instance, is one of three Walgreens on just seven blocks of Mission Street. The Walgreens closing at 745 Clement has another Walgreens, and a CVS, within five blocks. 

Seems pretty plausible that Walgreens’ saturation in San Francisco is their bigger problem (53 Walgreens compared to 22 CVS), and CVS is not closing any stores. And executives can give themselves bonuses, and write losses off on their taxes, if they blame everything on shoplifting, when other very obvious market forces are at work.

“Since working from home is here to stay, city center retail is going to see lower demand in the long run,” Stanford University economics Professor Nicholas Bloom told the Chronicle. “While Walgreens may have publicly blamed this on higher thefts, another factor is there are simply less people in the city center, spending less money.”

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Joe Kukura- Millionaire in Training

Joe Kukura- Millionaire in Training

Joe Kukura is a two-bit marketing writer who excels at the homoerotic double-entendre. He is training to run a full marathon completely drunk and high, and his work has appeared in the New York Times and Wall Street Journal on days when their editors made particularly curious decisions.