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The locked display cases proliferating in drug stores and big box stores, as we’ve noted repeatedly, present a retail conundrum. The purpose of locked cases is to curb shoplifting, but a survey by Consumer World found that when something they wanted to buy is locked up, fewer than 1 in 3 shoppers (32%) bother to summon an employee to unlock the case; a Retail Brew reader poll found that even fewer shoppers bother to summon an associate in that scenario, just 19%. So, if locking up goods apparently scuttles that many sales, is the solution worse than the shoplifting problem it’s meant to address?
Walgreens CEO Tim Wentworth didn’t exactly solve that mystery on a recent earnings call, during which the company reported quarterly losses of $265 million, but he threw more shade on the locked display cases than you might expect from a company that has installed so many of them.
“When you lock things up,” Wentworth said, speaking extemporaneously in response to the last question of the call from an analyst, “you don’t sell as many of them. We’ve kind of proven that pretty conclusively.”
To address shrink—the catchall term for merchandise that goes missing from warehouses, during transit, from backrooms, and from shoplifting from store aisles—Wentworth said the company is engaged in “hand-to-hand combat battle.” While he gave no specific ways in which Walgreens plans to retreat from or augment its use of locked cases, Wentworth did say he and the company’s head of asset protection had spoken recently and that there are “creative things that we are looking at, both as a company and as an industry, as it relates to the customer experience on shrink.”
Deja rue: Two years ago, on another earnings call in January 2023, James Kehoe, who was then Walgreens CFO, also admitted that the company had stumbled when it came to addressing shrink.
Walgreens had blamed “organized” shoplifting for why it had closed five stores in San Francisco in 2021, then invested in what Kehoe admitted was “probably” too much security in stores, since “security companies are proven to be largely ineffective.”
When it came to shrink, Kehoe said at the time, “maybe we cried too much” about the extent of the problem.