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Best Buy CEO Says Rise In Theft Squeezes Profits, Could Hurt Employee Retention

A nearly empty parking lot outside a Best Buy store in Montebello, Calif. On April 15, 2020, as the national electronics store chain remains closed to customers but open for pickups.

Frédéric J. Brown | AFP | Getty Images

Best Buy CEO Corie Barry said on Tuesday that the rise in thefts is affecting company profits and could hurt employee retention at a time when the job market is tight, especially in the hospitality industry. retail.

She said the retailer has seen a noticeable increase in organized crime, with people coming to stores to steal consumer electronics – and in some cases bringing a weapon like a gun or crowbar. She said the company will prioritize the safety of customers and employees, even if that means criminals come out with thousands of dollars in merchandise.

“These are traumatic experiences and they are happening more and more across the country,” she told CNBC’s “Squawk on the Street”.

Other retailers including Kroger, CVS Health and Walgreens Boots Alliance have also spoken of an increase in thefts – Walgreens has even said it is closing some stores because of it.

To fight organized crime, Best Buy is locking down some of its merchandise, hiring security guards in some locations and working with retail groups to research solutions, Barry said on a results conference call.

She said San Francisco and other parts of California were “hot spots” for crimes, but said there were problematic pockets across the country. In some cases, she said, more than a dozen people rush into a store and run out of merchandise. In other cases, it’s just a few people.

Over the past week, two Nordstrom stores in California have been targeted by groups of looters in this type of armed robbery.

Barry said she didn’t know why the crimes had increased, but that they were difficult to stop. The retailer discourages its employees from confronting thieves, and in some cases law enforcement prioritizes other types of crime.

“When we talk about why there are so many people looking for another job or changing careers, that would of course be something that would affect my concerns for our people because, again, the number one priority is simply human security, ”she said. “And it’s hard to potentially deal with this multiple times in one place.”

Best Buy has beaten expectations for fiscal third quarter earnings, but shares fall as Wall Street worries about weakening consumer electronics demand, higher promotion levels and cost of chain ‘high supply over the coming year.

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