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Dollar Tree vows to crack down on store theft

New shrink formats will surface during second half of year

Bill Wilson, Senior editor at Supermarket News

August 25, 2023

1 Min Read
Dollar Tree store.png
Dollar Tree will move certain products behind the counter.Bill Wilson

Dollar Tree is the latest grocery retailer to blame a shrinking profit margin on theft.

Even though the discount grocer put up strong second quarter numbers in most areas, gross profit margin dropped to 29.8%, reports CBS News. It was almost 33% in Q2 2022.

Theft is not the only reason behind the drop, but Dollar Tree CEO Richard Dreiling said during the latest financial call that the company will take a “very defensive” approach to shrink inventory.

The discount retailer will unveil new shrink formats during the second half of the year, including moving certain product behind the checkout counter. Dreiling said cases might be locked up.

Factoring in the cost to execute such measures caused Dollar Tree to lower financial expectations for the rest of FY 2023.

Target Chairman and CEO Brian Cornell was the first retail executive to mark theft as a serious problem when he addressed it during an earnings call earlier in the year. Cornell said theft could cost the company $500 million.

Walgreens is so concerned about the issue it designed a store in Chicago to deter shop lifting. Most of the store’s merchandise is located behind the counter, and workers are responsible for pulling items for shoppers. Store patrons use kiosks to shop digitally, and when their order is ready, everything is then paid for at the register. Two aisles containing “essential” items are still accessible by shoppers. 

Related:Dollar Tree rebounds in Q2

A Walgreens in San Francisco has gone to the extent of putting chains and locks on its freezer section.

Video is courtesy of ABC 7. 

 

 

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About the Author

Bill Wilson

Senior editor at Supermarket News

Bill Wilson is the senior editor at Supermarket News, covering all things grocery and retail. He has been a journalist in the B2B industry for 25 years. He has received two Robert F. Boger awards for his work as a journalist in the infrastructure industry and has over 25 editorial awards total in his career. He graduated cum laude from Southern Illinois University at Carbondale with a major in broadcast communications.

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