Home Depot executives this week suggested that a rash of thefts from the hardware chain is connected to the opioid crisis, but admitted they were “not positive about that” assertion.
Organized networks have stolen millions of dollars’ worth of items from the chain and stored it in warehouses, to the point that the thefts have impacted the company’s profit margins, according to the Los Angeles Times.
“This is happening everywhere in retail,” CEO Craig Menear said during a meeting with analysts and investors, according to the newspaper. “We think this ties to the opioid crisis, but we’re not positive about that.”
Such losses, known in the industry as shrink, are believed to cost retailers about $51 billion a year, and more than two-thirds of retailers said they have seen an increase in “organized retail crime activity” this year, but Menear’s comments mark one of the first occasions a retailer has invoked the opioid crisis, according to the Times.
Executives said on the call that in one such incident, a network of thieves was caught with $1.4 million in Home Depot products among $16.5 million worth of stolen goods overall.
The company is seeking technological solutions to the losses, including machine learning, to anticipate such crimes, and is installing technology to ensure its power tools will only work if they pass through the Home Depot point-of-sale system.
“We have to be vigilant about it,” Ann-Marie Campbell, Home Depot’s executive vice president of U.S. stores, said in the meeting, according to the Times. “We have initiated several pilots to reduce shrink across the board.”
The thefts are projected to narrow the retail chain’s operating profit margin to about 14 percent next year after margins of 14.5 percent in the third quarter of 2019, according to the Times.