NRF: Organized retail crime continues to rise
Washington, D.C. — The number of retailers that fell victim to organized retail crime groups increased in the past year, according to the National Retail Federation’s Organized Retail Crime Survey.
Of the 125 retail companies surveyed for NRF’s eighth annual survey, a record-setting (96%) said their company has been the victim of organized retail crime in the past year, up from 94.5% last year. Another 87.7% said ORC activity in the United States has grown over the past three years.
"What this tells us is that as retailers and law enforcement become more aware of and more proactive in pursuing organized retail crime gangs, criminals have become more desperate and brazen in their efforts, stopping at nothing to get their hands on large quantities of merchandise,” said NRF VP loss prevention Rich Mellor.
On a more positive note, the survey found that more retailers believe law enforcement is aware of and understands the severity and complexity of the issue (40% this year versus 32.3% in 2011). More than half (54.4%) said top management at their company is aware of the problems associated with organized retail crime.
Increases in violence and cargo theft were both found to pose problems for retailers as well. According to the survey, on average, 52.1% of companies have been victims of cargo theft in the past 12 months, up from 49.6% last year. A significantly higher percent of companies this year said cargo theft occurs mostly en route from the distribution center to the store (68.1% versus 57.4% last year). Four in 10 (43.5%) say these incidents also occur en route from manufacturer to distribution center and 15.9% say they happen at the distribution center.
The survey also indicates a growing trend in the level of violence retailers see when organized criminal gangs are apprehended (15% of incidents versus 13% in 2011). Retailers grappling with these violent acts also report that they believe more ORC offenders are engaged in drug activity. Nearly half (49%) of respondents estimate drugs and drug activity are linked to organized retail crime incidents.
When asked what new trends in organized retail crime they have noticed in the past year, retailers cited familiar issues involving the economy, returned stolen merchandise, gift card fraud, and increases in violent activity upon apprehension. However, new to the list of trends this year were specific references to digital receipt fraud; increased smash and grab incidents; and collusion with street gangs.
“Though retailers continue to make great strides in their fight against organized retail crime, sophisticated criminals with unending opportunities and anonymous outlets to sell their stolen merchandise are proving to be quite challenging for both retailers and law enforcement agencies working to combat this issue,” said NRF senior asset protection advisor Joe LaRocca. “With the types of organized retail crimes changing in severity and scope every day, and cargo theft and violent instances becoming more troubling, retailers are constantly on high alert.”
See related story Top 10 locations for retail criminal activity.
Walgreens total sales, comps dip in May
DEERFIELD, Ill. — Walgreens on Tuesday posted May sales of nearly $6 billion, a decrease of 1.6% as compared with the same month in fiscal year 2011.
The negative impact on comparable-store prescriptions filled due to no longer being part of the Express Scripts pharmacy network was 10.8 percentage points. Prescriptions processed by Express Scripts comprised 12.7% of Walgreens prescriptions in May 2011. May pharmacy sales decreased 3.9%, while comparable-store pharmacy sales decreased 8.5%. Comparable-store pharmacy sales were negatively impacted by 3.9 percentage points due to generic drug introductions in the last 12 months and by 0.3 percentage points due to the product mix of cough, cold and flu drugs.
Pharmacy sales accounted for 63.1% of total sales for the month.
Prescriptions filled at comparable stores decreased 7.6% in May. Calendar day shifts in May, which had one additional Wednesday and Thursday, and one fewer Sunday and Monday, compared with May 2011, positively impacted prescriptions filled in comparable stores by 1.3 percentage points.
Walgreens’ May sales announcement follows a statement from the drug store chain that its dispute with pharmacy benefit manager Express Scripts had been mutually dropped, and that Walgreens would be extending its partnership with OptumRx, one of the largest pharmacy benefit managers in the United States.
"Since Jan. 1, our underlying trend for number of prescriptions filled has improved," Walgreens EVP and CFO Wade Miquelon said. "Looking forward, we expect our number of prescriptions filled to be helped as employers and health plans take a variety of steps ranging from changing prescription benefit managers to changing language in new RFPs to provide continued access to Walgreens and our services. In what is the busiest selling season in recent memory, we are pleased that we have continued to receive notification of pharmacy plans regaining access to Walgreens pharmacies with new contracts that become effective throughout the remainder of the year. In addition, we extended our multi-year agreement to build on our strategic partnership with OptumRx, one of the largest pharmacy benefit managers in the United States."
Walgreens did see a small positive gain in total front-end sales, which increased 0.3%, compared with the same month in 2011; however, comparable-store front-end sales decreased 1%. Customer traffic in comparable stores decreased 2.3% while basket size increased 1.3%.
Sales in comparable stores decreased by 5.8%. The effect of calendar day shifts positively impacted total comparable sales by 0.8 percentage points. Last week, Credit Suisse analyst Ed Kelly projected that Walgreens would experience a 5% to 6% drop in comps, saying "the weak May results close out what should be a disappointing top-line quarter for the company," adding that "the loss of [Express Scripts] traffic and recent adjustments to the circular are impacting front-end sales."
Calendar year-to-date sales were $29.4 billion, a decrease of 2.2% from nearly $30.1 billion in 2011.
Family Dollar rolls out Redbox kiosks to stores nationwide
MATTHEWS, N.C. — Family Dollar is getting the Redbox treatment.
The discount store chain announced it inked a multiyear deal with the Coinstar subsidiary, through which Redbox kiosks will be installed at Family Dollar locations across the United States. Family Dollar customers will be able to rent new release DVDs at Redbox for $1.20 a night, Blu-ray discs for $2 a night and games for $2 a night.
"As Family Dollar continues to broaden its assortment and increase relevancy to our customer, Redbox is a natural addition to our growth initiatives," Family Dollar president and COO Mike Bloom said. "The Redbox kiosk is the definition of convenience for movie and game rentals and will provide value, convenience and additional reasons for customers to visit Family Dollar stores more often."