Best Buy CEO says rising theft is hitting profits, could hurt employee retention
A near empty parking lot in front of a Best Buy store in Montebello, California on April 15, 2020 as the electronics nationwide chain store remains closed to customers but open for pickups.
Frederic J. Brown | AFP | Getty Images
Best Buy CEO Corie Barry said Tuesday that rising theft is hitting the company’s profits and could hurt employee retention at a time when the labor market is tight, especially in the retail industry.
She said the retailer has seen a noticeable jump in organized crime, with people coming to stores to steal consumer electronics — and in some cases, bringing a weapon like a gun or a crowbar. She said the company will prioritize the safety of customers and employees, even if that means criminals are running out of the door with thousands of dollars of merchandise.
“These are traumatic experiences and they are happening more and more across the country,” she said on CNBC’s “Squawk on the Street.”
Other retailers, including Kroger, CVS Health and Walgreens Boots Alliance, have also spoken about an increase in theft — with Walgreens even saying it is closing certain stores because of it.
To fight organized crime, Best Buy is locking up some of its merchandise, hiring security guards in certain locations and working with retail trade groups to look for solutions, said Barry on an earnings call.
She said San Francisco and other parts of California have been “hot spots” for the crimes, but said there are problematic pockets across the country. In some cases, she said, more than a dozen people rush in a store and run out with goods. In other cases, it’s just a couple of people.
In the past week, two Nordstrom stores in California have been targeted by groups of looters in these types of “smash-and-grab” robberies.
Barry said she’s not sure why the crimes have increased, but said they are hard to stop. The retailer discourages its employees from confronting the thieves and in some cases, law enforcement prioritize other kinds of crimes.
“When we talk about why there are so many people looking for other jobs or switching careers, this of course would be something that would play into my concerns for our people because again, priority one is just human safety,” she said. “And it’s hard to deal with this potentially multiple times in one location.”
Best Buy topped expectations for fiscal third-quarter earnings, but shares are falling as Wall Street worries about weakening demand for consumer electronics, higher levels of promotion and elevated supply-chain costs in the year ahead.