Walmart may raise prices, close stores due to shoplifting

Walmart removing cashiers from store

Walmart is testing a store that will only offer self-checkout.

NEW YORK - Walmart CEO Doug McMillon is warning that theft has worsened at the retail giant and may force drastic moves by the company.

McMillon told CNBC that theft is "higher than what it has historically been."

He also said that "prices will be higher and/or stores will close" if authorities not being strict about prosecuting theft isn’t "corrected over time."

Theft cost retailers $94.5 billion in 2021. Organized retail crime incidents soared 26.5% last year, according to the 2022 National Retail Security Survey.

Target and Rite Aid executives are among the other retail leaders who have raised the alarm about retail theft in recent months.

Target takes a hit from shoplifting

The CEO of Target says rampant shoplifting at its store is a major drain on profits. The company is working on training and technology to help cut down on theft and is working with other companies to find industry-wide solutions.

Michael Fiddelke, Target’s CFO, told investors and analysts in mid-November that shoplifting, known as shrink in the industry is becoming a major drain on profits.

Fiddelke said it, "Has already reduced our gross margin by more than $400 million versus last year, and we expect to reduce our gross margin by more than $600 million for the full year.

"This is an industry-wide problem that is often driven by criminal networks, and we are collaborating with multiple stakeholders to find industry-wide solutions," he said.

One of those solutions is locking up more items.

Images from a Target in Queens showed items like toothpaste and razors locked behind glass doors. Customers are required to use a sensor device to summon store workers to unlock the items.

Shoplifting at Rite Aid stores

Retail stores across the country have reported increased thefts coupled with supply chain issues. Actor Michael Rapaport shined a light on the shoplifting problem at a Rite Aid story in his Manhattan neighborhood.

Rite Aid CEO Heyward Donigan said the pharmacy chain experienced "unexpected headwinds" from shrink, "particularly in our New York urban stores."

Rite Aid Chief Retail Officer Andre Persaud said, "We're looking at literally putting everything behind showcases to ensure the products there for customers who want to buy it."

NYC stores experiencing shoplifting crisis

The company’s front-end gross profit was "impacted by a $5 million increase in shrink," according to CFO Matt Schroeder.

FOX Business contributed to this report.