San Francisco Chronicle Is Missing the Point on Walgreens Shoplifting, Industry Expert Says

A San Francisco Chronicle story that cites police shoplifting data to cast doubt on Walgreens’s explanation that organized, rampant retail theft is the reason it is closing five more stores in the city misses the point by downplaying that most shoplifting cases in the city are never reported to law enforcement, a California retail advocate told National Review.

According to police data published by the Chronicle on Friday, two of the five stores that Walgreens is closing have reported fewer retail thefts so far in 2021 compared with 2020. One store has reported only three retail thefts this year. Another has reported only seven.

But Rachel Michelin, president and CEO of the California Retailers Association, said it’s not surprising that police reports don’t show the true impact that a surge of shoplifting is having on the city’s retailers. Most shoplifting cases aren’t reported, she said, and the reason they’re not reported is “because nothing would happen if they were reported.”

The debate came to a head last week when Walgreens announced that it is closing five more stores in the city and cited “ongoing organized retail crime” as the reason for the decision. “Retail theft across our San Francisco stores has continued to increase in just the past few months to five times our chain average,” Walgreens announced, adding that the company has increased its investments in security measures in San Francisco stores to 46 times the chain average. The retailer previously said it has closed 17 stores in the city over the past five years.

“At issue here is organized retail crime, by which I mean with professional thieves steal goods from retailers that are ultimately sold, primarily in online digital marketplaces,” Walgreens spokesman Phil Caruso said in an email to National Review.

The Chronicle pointed to the police data to cast doubt on Walgreens’s announced explanation for the closures. According to the Chronicle, “the five stores slated to close had fewer than two recorded shoplifting incidents a month on average since 2018.” But the data also show that two of the stores have seen substantial increases in reported retail theft in recent years. A store on Clement Street that reported five cases in 2018 has had 44 through mid October 2021. A store on Gough Street that reported no shoplifting cases in 2019 has reported 45 this year.

That store was the scene of a brazen heist that went viral over the summer when a man on a bicycle was caught on camera loading up a garbage bag full of products and riding out – past a security guard – without paying.

Investigators say Jean Lugo-Romero stole from the store four days in a row. He was eventually apprehended on 15 charges, including grand theft and burglary.

Michelin said typically shoplifters are not arrested, in part because in 2014 the state passed Proposition 47, which emboldened criminals by making retail theft under $950 a misdemeanor. Michelin said criminals know the law and intentionally keep their hauls under the $950 limit.

“They know it’s a misdemeanor, they’ll just get a ticket written. Here’s your ticket. You’re free to go,” she said, adding that criminals in San Francisco openly sell stolen goods on the street.

As a result, many retail employees have taken to skipping the call to police and the paperwork hassle that comes with it. “Why report when they’re not going to show up, and they weren’t showing up because they knew the district attorney wasn’t going to prosecute,” Michelin said.

The Chronicle quoted Democratic city leaders who speculated on other reasons, besides the surge in retail theft, that Walgreens is “abandoning the community.” Mayor London Breed speculated that Walgreens may be oversaturated in San Francisco — there are 53 Walgreens in the city. There are Walgreens stores within a mile of all five of the stores closing in November, according to the company. A Stanford economist suggested that Walgreens may just have fewer customers in San Francisco, which saw 15 percent of its residents leave during the pandemic and not return.

But Michelin said the fact that Walgreens cited rising crime as its reason for closing the stores is a good reason to believe it is the main issue. The Illinois-based company has closed hundreds of stores over the last several years, typically without drawing national scrutiny.

“It would have been easier for them to say they were underperforming stores, so we’re going to close,” Michelin said. “They don’t like to be in the national news for closing stores, so the fact that this is what they said tells you it is a pretty significant problem.”

Walgreens isn’t the only retailer sounding the alarm about the surge of retail theft in San Francisco. CVS, a Walgreens competitor, has labeled San Francisco “one of the epicenters of organized retail crime” in the country. In July, Target announced it was cutting operating hours at its San Francisco stores because of rampant shoplifting. Days later, another viral video showed at least ten people running out of a Nieman-Marcus store with high-end handbags and hopping into a getaway car.

San Francisco supervisor Ahsha Safai tweeted his concerns at the time that “if we don’t deal with organized retail crime I fear many other stores will close.”

Michelin said more of the blatant crimes are showing up on viral videos, but she added, “I do think there’s a lot going on that people don’t see.” City and police leaders have urged local businesses to utilize the city’s 10-B program, which allows businesses to hire off-duty police officers to provide security at overtime pay rates, she said. Walgreens said the bulk of its additional security spending this year was from its participation in that program.

“When I talk to retailers they tell me that’s unsustainable,” Michelin said. “That is not a long-term solution to this, because the cost is so high.”

Stores also have been urged to hire more private security to deter crime, she said, but they have limited authority and are generally there to observe and report, not to apprehend suspected shoplifters. Some of the viral shoplifting videos show uniformed security personnel standing by as stores are ransacked.

Michelin credited the San Francisco Police Department for engaging on the issue and looking for solutions, including increasing its presence in prominent shopping areas.

“We need to quit pointing fingers,” she said. “We need to find solutions, and we need to think outside the box, and figure out how we can solve this problem.”