Costco Isn't Facing Devastating Surges in Theft Like Target and Walmart — and the Reason Is Very SimpleThe retailer's CFO revealed its strategy during a fourth-quarter-earnings call.

ByAmanda Breen•Sep 29, 2023

Major retailers are battling surging inventory theft — but not Costco.
CFO Richard Galanti says the retailer's limited self-checkout is to thank.

Shrinkage, the loss of inventory not due to sales, is plaguing some of the biggest names in U.S. retail — but not one of them.

Costco's remained relatively unscathed by increasing theft, and its chief financial officer Richard Galanti offered a simple explanation during the company's fourth-quarter earnings call: limiting self-checkout,TheStreetreported.

Self-checkout is only available at select locations, according to the company's site. That's in stark contrast to some retailers grappling with theft increases likeWalmart, which offers the option at "a number of locations" and even piloted exclusively self-checkout stores,CNN Businessreported.

Inventory shrink spiked 53% to $94.5 billion between 2019 and 2021, according to the National Retail Federation'sannual survey. And areportfrom the UK's University of Leicester found that theft comprises almost 4% of inventory for retailers with self-checkout versus 1.5% for those without.

Walmart,Home Depotand Target executives have voiced concerns about the issue in recent earnings calls, with Target CEO Brian Cornell saying it's "unacceptable" and unsustainable,Yahoo Financereported. The retailer is closingnine stores across four statesdue to ongoing crime.

“在过去的一年里,(收缩)增加了莱斯s than one basis point [0.01 percentage point] more," Galanti said on the call. "So, no, thankfully, not a big issue for us."

Amanda Breen

Entrepreneur Staff

Features Writer

Amanda Breen is a features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.