Target’s shuttered small-format store on Folsom Street in San Francisco’s SoMa neighborhood, November 2023.
Gabrielle Fonrouge
On Sept. 26, Target set off a nationwide firestorm when it stated it would shut 9 shops in 4 states as a result of theft and organized retail crime had made them too dangerous to run.
On its face, Target’s announcement was proof that retail crime was stopping one of many nation’s most distinguished retailers from working shops profitably and safely. It challenged skeptics who believed that retailers had exaggerated the impact of organized retail crime and used it as an excuse for poor monetary efficiency.
There was only one drawback with the reason Target gave for closing shops: The locations it shuttered usually noticed fewer reported crimes than others it selected to maintain open nearby, a monthslong CNBC investigation has discovered.
CNBC’s findings forged doubt on Target’s clarification and elevate questions on whether or not the corporate’s announcement was designed to advance its legislative agenda — in search of a crackdown on organized retail crime — and to obscure poor financial performance at the shops as it grapples with sliding sales.
In some instances, Target selected to maintain working shops in busier areas that had higher foot site visitors or higher median incomes, although the locations noticed extra theft and violence, the probe revealed. In these areas, police departments could also be higher funded because of higher tax bases, and consumers may have more to spend on discretionary goods.
Many of the locations Target closed had been “small-format” shops the corporate opened during the last 5 years as a part of an experiment to expand its footprint in dense, city areas. The strikes adopted Target’s resolution to shutter 4 comparable shops within the spring that it stated had been underperforming, Retail Dive previously reported.
At the time it introduced the 9 store closures in September, Target stated, “We can’t proceed working these shops as a result of theft and organized retail crime are threatening the protection of our staff and visitors, and contributing to unsustainable enterprise efficiency. We can solely achieve success if the working and procuring setting is secure for all.”
The information got here simply hours after the National Retail Federation issued a key annual retail security survey — wherein it stated violence at shops had elevated however losses from theft hadn’t changed much — and precisely one month earlier than the commerce group was planning to lobby Congress for stiffer punishment for organized theft offenders. Target CEO Brian Cornell sits on the NRF’s board of administrators and is a member of its government committee.
One longtime retail government and knowledgeable questioned whether or not Target’s claims about theft at the shops had been designed to masks its struggles, because the retailer’s gross sales fell from the prior 12 months in each its second and third quarters.
“I do not wish to use the phrase ‘stunt,’ as a result of I do not know precisely what went on in Minneapolis [where Target is based], however to me, it learn like a stunt, seeking to divert consideration from the corporate’s lack of efficiency total,” stated Mark Cohen, a professor and director of retail research at Columbia Business School who beforehand served because the CEO of Sears Canada, Bradlees and Lazarus shops.
“They didn’t disclose their precise scarcity statistics,” he added. “They talked about it normally phrases; they didn’t disclose another components that will have induced them to resolve to shut any of these shops. They implied that the one purpose they had been closing the shops was due to theft. That might or might not be true. My guess is: Not true.”
In response, Target spokesperson Jim Joice advised CNBC that as a development firm, Target is “repeatedly opening new shops, initiating remodels, investing in our staff and infrastructure, and refining our operations as we search to ship the procuring expertise that individuals have come to anticipate of Target.”
“In 2023 alone, we opened 21 new shops and reworked 150 shops as a part of our almost $5 billion funding in strategic initiatives. The lately introduced store closures associated to security, retail theft, and unsustainable enterprise efficiency signify lower than 0.5% of our U.S. footprint, with 1,956 shops at the moment working and serving our visitors,” Joice stated.
Target consumers are inspired to name for assist accessing merchandise which can be kept in locked instances.
Gabrielle Fonrouge
CNBC used public report requests and regulation enforcement sources to acquire crime statistics and 911 name knowledge for 21 Target shops in New York City, Seattle, the San Francisco Bay Area, and Portland, Oregon — the 4 areas the place the retailer closed shops. The knowledge consists of the 9 shops Target shuttered and comparable locations it kept open nearby, spanning from January 2021 by means of September 2023, when the closures had been introduced. The data present what number of occasions Target was listed because the sufferer of against the law at the locations, or what number of occasions police had been referred to as to the shops and arrested somebody, stated they addressed the problem or generated a report or log of what occurred.
The data paint a startling image of the frequent crime at the locations. But in addition they present a transparent development. Nearly each store the retailer closed noticed much less police exercise and fewer reported crime incidents than the locations it kept open nearby.
Only one of many 9 shops that Target closed throughout the 4 areas, a location in Pittsburg, California, noticed extra crime and police exercise than its closest comparable location, in Antioch, California, in response to CNBC’s evaluation.
Store-specific crime knowledge for the 9 locations Target closed has not been beforehand reported.
Like most knowledge on theft, organized retail crime, and “shrink,” or retailers’ inventory loss, the data obtained by CNBC will not be full. Theft and crime total are troublesome to measure, as they incessantly go unreported and undetected, specialists have advised CNBC.
Target declined to offer its inside crime figures. Without these numbers, the data obtained by CNBC are “the one image that you will get” about what crime appeared like at the locations the retailer closed and those it did not, stated Christopher Herrmann, an assistant professor at John Jay College of Criminal Justice and an expert in crime analysis and mapping.
“It’s attention-grabbing that they are utilizing public security, or worker security, as an excuse, sort of, for closing the shops,” stated Herrmann. “Because the fact is, they don’t seem to be closing the shops with the best fee of retail theft.”
In response, Target’s Joice advised CNBC that “store-level incidents differ extensively in severity, and police knowledge will not present the complete extent of what our groups expertise on the bottom.”
“We have repeatedly shared monetary knowledge and inside knowledge on the rise of theft-related crime,” Joice stated. “We have additionally persistently conveyed our emphasis on security and highlighted staff members’ experiences that show the impression that theft and organized retail crime have had on our firm, our visitors, and the communities we serve.”
“We proceed to speculate closely in security, together with methods to forestall and cease theft and organized retail crime in our shops, in addition to partnering with regulation enforcement, legislators, and retail friends to hunt long-term options,” Joice stated.
The San Francisco Bay Area
Target closed three shops within the San Francisco Bay Area — one in San Francisco, one in Oakland and one other in Pittsburg, a suburb about 40 miles outdoors town.
All the locations had been inside just a few miles or a brief drive away from one other Target that remained open, which may have performed a job within the firm’s resolution to shutter them, specialists stated.
Retailers usually “miscalculate how a lot the brand new store will cannibalize current shops,” stated Cohen, of Columbia Business School.
Target opened its now-closed small-format store in Oakland in 2019, simply two miles away from its Emeryville location. Between January 2021 and September 2023, 96 crime incidents had been reported at the Oakland store in contrast with 440 at the Emeryville store over the identical timeframe.
Target’s Emeryville, California, location stays open about two miles away from a store the retailer closed in Oakland.
Gabrielle Fonrouge
The findings replicate some total theft tendencies in Oakland and Emeryville in 2023. Overall theft, excluding automotive theft, was down 15% in Oakland from Jan. 1 to Oct. 29, in contrast with the identical interval a 12 months in the past, in response to police data. In Emeryville, petty theft and grand theft were up 16% and 14%, respectively, for the interval from Jan. 1 to Oct. 31, in contrast with the identical interval a 12 months in the past, police data present.
Demographics is one other issue that might be at play. In the ZIP code the place the Oakland store is situated, the median earnings degree is $76,953, in contrast with $114,286 in Emeryville, in response to U.S. Census Data.
People with higher incomes are likely to have extra money to spend on discretionary items. Police departments in these areas might also be extra inclined to implement property crimes equivalent to theft if there is much less violent crime to take care of, which may clarify the distinction in police responses between shops, specialists who research crime have advised CNBC. For instance, one murder and three rapes have been reported in Emeryville thus far this 12 months. In comparability, 106 homicides and 159 rapes have been reported in Oakland in the identical timeframe.
Looters rob a Target store throughout protests in Oakland, California, on May 30, 2020, over the demise of George Floyd.
Josh Edelson | AFP | Getty Images
Within town of San Francisco, the small-format store on Folsom Street that Target closed noticed at least 84 crime incidents that resulted in police experiences between January 2021 and September 2023.
Two miles away at Target’s sprawling Union Square location, which stays open, 486 incidents had been recorded throughout the identical timeframe.
The shops’ neighborhoods and the foot site visitors they noticed additionally differentiated them.
The Target signal from its Mission Street store in San Francisco’s Union Square glows on a constructing throughout the road, November 2023.
Gabrielle Fonrouge
The closed store was sandwiched between a automotive dealership and a freeway in an space that locals stated had gentle foot site visitors and had attracted a homeless encampment through the Covid pandemic. In comparability, Target’s Union Square location is within the coronary heart of San Francisco’s bustling vacationer and procuring district.
Portland
Target closed three shops within the metropolis of Portland that noticed much less crime than locations it kept open.
For instance, the Target on Southeast Washington Street, which stays open, had 718 reported incidents between January 2021 and the top of September 2023, which is greater than all three closed shops noticed mixed over the identical time interval, in response to police data.
One of the locations, a small-format store on Northeast Halsey Street, was open for lower than three years earlier than it was closed.
Based on accessible knowledge in Portland, CNBC’s findings echo some space crime statistics.
In the Hazelwood neighborhood, the place Target’s store on Southeast Washington Street stays open, reported larcenies are up 5% in 2023 between Jan. 1 and the top of October, in contrast with the identical interval a 12 months in the past. In Hollywood and Richmond, the place Target closed shops, reported larcenies had been down 37% and 8%, respectively, for the identical time interval.
However, in downtown Portland, the place Target’s store on Southwest Morrison Street was closed, reported larcenies had been up 13% for that point interval.
Seattle
Target closed two shops in Seattle, each small-format locations that noticed fewer crimes than the closest Target shops.
For instance, the shuttered Targets on Northwest Market Street and University Way Northeast had 235 and 395 reported incidents, respectively, between January 2021 and the top of September 2023. In comparability, two locations about 5 miles away that stay open, on Second Avenue and Northeast Northgate Way, noticed 878 and 901 reported incidents, respectively, throughout the identical time interval.
In some instances, the information additionally matches native crime statistics. Between Jan. 1, 2021, and Oct. 31, 2023, reported larcenies had been 30% decrease within the space of Target’s Northwest Market Street location and 33% decrease within the space of the University Way store, each of which had been closed, than within the space the place Target’s Northeast Northgate Way store stays open.
New York City
Target closed one store in New York City. The location was in East Harlem and housed inside a bigger procuring advanced that borders the East River, a few 15-minute stroll from the closest subway station.
It recorded at least 844 incidents between January 2021 and the top of September 2023, however the figures pale as compared with these throughout the identical time interval at different Target shops dotted throughout the Big Apple.
A store on Greenwich Street in Lower Manhattan noticed 2,090 reported incidents, greater than double the quantity in East Harlem in that point interval. At one other location, on Grand Street, 1,628 incidents had been recorded.
The locations are vastly totally different. The two Lower Manhattan locations are in busier areas with extra foot site visitors and higher median earnings ranges. In the ZIP code the place the East Harlem store was situated, the median earnings is $36,989, in contrast with greater than $250,000 within the space across the Greenwich Street store and $43,362 within the space across the Grand Street location, U.S. Census knowledge exhibits.
Target closed the East Harlem location — due to crime and security, it stated — at the identical time it deliberate to open a store a few mile and a half away on West one hundred and twenty fifth Street in Harlem. Crime tendencies are worse within the space the place the brand new store is opening, in response to police data.
Target’s New York City store in East Harlem was housed inside a bigger procuring advanced.
Gabrielle Fonrouge
At the time Target introduced the East Harlem closure, reported petty theft incidents had been down 2.5% between Jan. 1 and Sept. 24, 2023, within the space the place the East Harlem store was and up 9% throughout the identical interval within the space the place the proposed store will likely be, in contrast with the identical interval a 12 months in the past. Target didn’t touch upon the discrepancy.
Methodology: When analyzing 911 name logs and different crime knowledge for this report, CNBC included in its tally solely incidents that led to an arrest, police report or log, or incidents that police stated they responded to and dealt with. Unfounded complaints, duplicate calls, requests for backup, and store and welfare checks had been weeded out from the logs and not counted, together with different irrelevant data. Mental well being crises, overdoses, car thefts, car burglaries and different occasions that weren’t straight associated to Target or appeared to occur outdoors the confines of the store had been additionally not included.
— Graphics by CNBC’s Gabriel Cortes