Wal-Mart’s bottom line hurt by "shrinkage"

Dan Gorenstein Aug 18, 2015
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Wal-Mart’s bottom line hurt by "shrinkage"

Dan Gorenstein Aug 18, 2015
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Wal-Mart’s a huge company. It’s always been big on efficiency.  But the behemoth announced Tuesday it’s also plagued with problems of petty theft.

“It just shows you can always be more efficient. And it’s something the company is very focused on,” says company spokesperson Brian Nick.

Wal-Mart has already taken steps to crack down on its five-finger discount problem. Nick says at some stores it’s added a new position — what the company calls an “asset protection customer specialist.”

“Those associates are positioned at doors on the way out. And in certain situations will ask a customer to see a receipt,” he says.

According to the National Retail Federation, companies lost more than $30 billion last year due to theft. And they aren’t the only loser, says the Federation’s Bob Moraca.  

“Those losses at some point, just like all the other fixed costs of doing business, have to get passed on to the consumer,” he says.

Now, shrinkage is more than just theft and a way to make a cheap George Costanza joke – it’s also damaged goods and spoiled food. Brian Yarbrough, an analyst with Edward Jones, says sure, shrinkage is a fact of retail life, nothing he’s going to lose sleep over.

“It’s the least of my concerns of their current headwinds,” he says. “I’m more concerned about all the investments in labor and e-commerce.”

Yarbrough says Wal-Mart’s real test is getting more people to buy more stuff — not just thinking up ways to stop them from swiping it.  

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