As retailers leave cities, one grocery chain trying to stay
Keith Redmond wasn't thrilled when Giant Food closed one of the entrances to its supermarket in Bowie, Md., because it created a longer walk to the pharmacy for his elderly father.
So when Redmond spotted company president Ira Kress walking past oranges in the produce section recently, he made a point of politely voicing his concerns for his father. “He's got mobility issues,” said Redmond, who recognized Kress from his photo on signs around the store. “From a customer's point of view, it's frustrating.”
Kress would rather not make it harder for shoppers to enter the supermarkets he oversees, but closing the entrance is worth it, he said, because it creates more obstacles for shoplifters and allows for fewer guards. It's one way the regional grocery chain is trying to confront a trend reported by retailers across the country: rampant and pervasive theft.
Crime isn't the only problem retailers face right now. There's also decreased foot traffic in urban centers and inflation-related issues such as higher labor and real estate costs. Combined, these forces are leading some of the country's largest companies to take a hard look at underperforming markets, and in some cases, close stores.
But shoplifting is high on Kress's mind these days.
“To say [theft has] risen tenfold in the last five years would not be an understatement,” Kress said, noting that violence has also “increased exponentially.”
The Bowie store is about 19 miles east of downtown D.C. But the problems retailers face have been particularly pronounced in larger cities — Walmart, Whole Foods, Nike, Kroger, Nordstrom, Old Navy and Target have announced exits from major urban areas. In addition to D.C. itself, other cities seeing news of stores pulling out include San Francisco, Portland, Philadelphia, Chicago, Atlanta and Seattle.
The trend, which industry experts say is in its beginning stages, could foreshadow a further emptying of downtowns already wounded by the pandemic. Although retail vacancy rates for dense urban centers have been declining over the past decade, figures from real estate data firm CoStar show the numbers inching up in some cities.
“For the big box and the grocery [stores], which are trying to optimize a singledigit margin, it is very difficult to operate, and you will see more and more exits happening,” said Lakshman Lakshmanan, senior director in Alvarez & Marsal's consumer and retail group.
Giant Food — which has 165 supermarkets across D.C., Delaware, Maryland and Virginia — hasn't closed any stores yet, and Kress said he's taking certain actions, knowing they inconvenience shoppers, because “the alternative is worse for customers.”
“The last thing I want to do is close stores,” Kress added. “But I've got to be able to run them safely and profitably.”
Crime
Idling near the bakery display, waving hello to associates stocking produce, Kress reminisced about his early years at the supermarket chain. As an 18-yearold working as a parttime cashier at a store in Montgomery County, Md., Kress often saw people snatch cigarette boxes from a large display at an aisle endcap.
Thieves now target many other goods, Kress said. “It's continued to escalate,” he said. “So now it's Tide and Dove and razor blades and Olay, or roasts or shrimp or crab legs.”
And violence has become a constant worry for him.
“We used to chase shoplifters,” he said. “And you'd get the product back, and nobody would ever fight you . . . . I didn't worry about somebody pulling a knife or gun on me [4o] years ago.”
Kress frequently considers the worst-case scenario. Last year, a woman at a Giant store fired her gun at an armed guard after he confronted her for stealing. The guard also discharged his weapon, and they both died.
Shoplifting has also become a form of organized crime involving coordinated operations “from the theft of goods through the laundering of proceeds generated from the resale of stolen merchandise,” according to a study from the National Retail Federation.
“We're seeing the highest level of organized retail crime and theft ever,” Lakshmanan said.
Retailers reported that incidents of organized retail crime increased in 2021 by an average of 26.5 percent, according to the retail federation. Store owners, the report says, blamed organized retail crime for about half of the $94.5 billion lost that year to retail shrink — the depletion of inventory caused by something other than sales.
Stores are experimenting with ways to mitigate the issue. Giant Food has hired security guards — some of them armed, depending on the history of violence in a given store — and limited self-checkout to 20 items. The company also secured items such as razor blades in wall dispensers that make noise when items are removed.
REI, which announced it is closing its Portland, Ore., location next year after nearly 20 years there, spent more than $800,000 in 2022 on additional security at the location, a spokesperson told The Washington Post.