Grocers have long contended with store theft. But over the past few years they’ve seen an unsettling rise in a new kind of retail crime — one that is often carried out by groups of individuals who are able to get around traditional store security measures.
Organized retail crime (ORC) has disrupted operations at Walmart, Target, Kroger and many other retailers. It has become the main contributor to the nearly $100 billion in shrink that retailers in the U.S. now experience annually, according to the National Retail Federation (NRF). More than half (52.9%) of retailers recently surveyed by NRF reported that ORC has increased. None reported a decrease.
David Johnston, NRF’s vice president of asset protection and retail operations, calls the past few years a “perfect storm” for ORC noting that while the issue has been around for years, the pandemic and current economic conditions have accelerated the problem. The social norm of wearing face masks in stores, experts say, has contributed to an increase in theft and emboldened “boosters” — an industry term for ORC thieves.
As new technologies roll out to minimize ORC on the sales floor, grocers are establishing ORC units staffed with trained investigators who work with local law enforcement and prosecution to dismantle ORC crime rings entirely, and the outcomes of these teams are already proving successful, experts said.
Not a new issue, but an escalating one
Organized retail crime is just as it sounds: an organized, targeted plan executed by groups of individuals with the purpose of financial gain. ORC crime rings perform pre-meditated robberies, striking when a store isn’t fully staffed, having a getaway car or form of escape on standby and stealing as many of one type of item as they can carry, experts explain.
Retailers saw ORC incidents increase 26.5% in 2021, and eight in 10 retailers surveyed reported an increase in violence and aggression associated with ORC incidents over the past year, according to the NRF report.
In most cases, items stolen by boosters are not sought after because of their dollar value alone, but rather by the item’s ability to be resold, Johnston said. Shoppers searching for cheaper goods online, at local shops and at flea markets oftentimes don’t realize they are purchasing products originally stolen by ORC crime rings.
“Anything that is in demand for a consumer is in demand for a booster,” said Karl Langhorst, an asset protection executive as well as adjunct criminal justice professor at the University of Cincinnati who served as senior director of loss prevention for Kroger for nearly nine years.
The top items targeted by ORC offenders include a number of items often found in grocery stores, such as health and beauty products, food and beverage items, housewares, office supplies, infant care and toys.
Johnston said meat and seafood, energy drinks, alcohol, over-the-counter medications, razor blades, detergents, baby formula and children’s food are some of the most frequently stolen items from grocery stores.
In addition to carrying a wide variety of items, grocers’ products are on open display making it easy for a booster to sweep all desired products off the shelf, into bags and slip out of the store, experts noted. Grocery stores are also easy to access and in a majority of communities.
“Anyone can walk through the doors,” Langhorst said.
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Catching them in the act
Experts ballpark the first ORC units taking shape within retail companies between 2005 and 2007, but in recent years more ORC units have been established as ORC initiatives and precautions have become a priority. In the early 2000s, Safeway, for example, was one of the first in the grocery industry to establish an ORC team after it set up the unit within two of its Tom Thumb divisions.
“It’s the last year or two that many CEOs and c-suite [executives] really started to focus, not just in grocery, but in retail in general, on the problems of ORC,” Langhorst said. “It’s always been at the back of the conversations and things have been discussed about it, but for CEOs to really start to talk about it as part of their financials and talk about it in earnings releases, [shows] it has really come in the forefront.”
Nearly one-third of retailers surveyed by NRF said they have established a dedicated ORC team, but that still leaves a majority of retailers (68.5%) without one. In the grocery sector specifically, around three quarters of food retailers have programs set up to address ORC while many other companies are working on plans, according to the Food Industry Association.
ORC teams have led to more apprehensions, prosecutions and civil demands of ORC crime, per NRF’s report, and experts note that they are helping retailers better detect theft patterns, behaviors and repeat offenders.
ORC team sizes vary widely, with NRF reporting that the average size based on surveyed retailers was 17.2 people and the median team size was seven. Experts said the size of the units can vary based on factors like the retailer's division size, geographical location, store footprint, staff size and the level of its ORC issue in a given area.
More retailers have loss prevention and asset prevention teams in place than they do ORC teams, according to NRF’s survey, and the former are often larger with a median of 32 team members.
But Langhorst notes that there is a significant difference between the role of ORC investigators and loss/asset prevention management, despite some obvious overlaps.
“Understand that ORC is a specialty,” Langhorst said. “When you’re doing an ORC investigation, it’s completely different than many other types of asset protection roles and investigations. It requires a different knowledge set, not only on how to conduct those types of investigations, but state laws. It takes a person with a background strong in investigations but is also able to partner with law enforcement as well as with other retail asset protection ORC teams.”
This “knowledge set” includes identifying booster patterns since it is impossible to look at every case, training store management teams, filing case reports to local law enforcement and seeing the prosecution through, Langhorst said.
More grocery companies are beginning to assemble ORC teams in order to combat shrink caused by theft. In October 2017, Albertsons reemerged into the ORC prevention space through a brief partnership with Alto, a company that specializes in loss prevention and technological security services.
Langhorst, who is also a senior advisor at Alto, noted that Alto has other grocery partners who have turned to the company for help in ORC prevention as well as other theft security measures.
Albertsons, Kroger and Weis Markets all have job postings in search of loss prevention, asset prevention or ORC investigators. Weis Markets, for example, has job listings on LinkedIn as well as on its own website for an “RCI: Organized Retail Crime Theft Investigator” at numerous locations. The position requires the investigator to “identify, investigate, and resolve external theft and organized retail crime within an assigned geographic area,” the listing stated.
The Weis role will also “process retail theft accordingly and participate in the prosecution process and court proceedings,” per the listing.
Grocery Dive reached out to Kroger and Weis for further information on their ORC efforts, but they declined to comment or confirm if they had established an ORC team. While Albertsons would not go into specifics, a spokesperson did confirm the company has continued taking measures to combat ORC.
Prevention technology and deterrents
Across the board, retailers are increasing their budgets for loss prevention, both with ORC units and technology. NRF’s survey found 52.4% of surveyed retailers boosted their budgets for capital and equipment, including anti-theft technology like artificial intelligence-based video analytics, locking cases, autonomous security robots and license plate recognition.
Langhorst noted that an up-to-date security camera system is a must-have for a successful ORC unit. There are also several innovations that try to deter boosters right in store aisles.
Companies like Indyme are piloting these technologies. That company has rolled out locked display units called “Freedom Cases” that customers can gain access to with their phones. Recent news reports announced Kroger and Safeway are piloting Freedom Cases in order to mitigate theft while also boosting convenience.
“This [traditional] lock case experience is horrible,” Indyme CEO Joe Budano said in an interview. “We all know it from our own personal experiences. We know it from retailers. And we know that when you lock stuff up, [retailers are] going to see a 15[%] to 25% reduction in sales.”
Aside from Freedom Cases, Indyme has also rolled out anti-theft systems that utilize cameras positioned at store exits and audio speakers placed near commonly stolen items that can broadcast messages to would-be thieves.
Budano noted that both these devices have been especially helpful in preventing meat and poultry theft in grocery stores.
But Langhorst points out that customers oftentimes still feel their shopping experience is infringed on with these extra measures, making implementing this type of technology an uphill battle for grocers.
“When you go in an apparel store, [shopper’s] expectation is for that item to have a [security] tag on it,” he said. “When you go into the grocery store, you don’t expect a security device.”
Heightened urgency for grocery
Products with an expiration date that are stolen and resold pose a higher risk to consumers, Johnston said. These items are often repackaged, have their expiration dates altered or are tampered with, posing health and safety issues for people who buy them secondhand.
To minimize this threat, a number of grocers use the manual solution of an EAS tagging system, which is a sticker that goes onto the package. If a booster tries to pull it off, the product’s package is damaged and cannot be resold online or in physical marketplaces, said FMI’s Vice President of Industry Relations Doug Baker.
Still, there are numerous cases of food items being tampered with. Multiple experts gave the example of baby formula.
“There have been incidents in past investigations where dried powder infant formula has been cut with flour and altered,” Johnston said. “So they’ve been cleansed and repackaged and dates have been altered, which now causes a safety concern for the health of the child.”
Beyond the grocery and retail sales floor, legislators are starting to take action. A proposed bill currently being presented in the House of Representatives and Senate would establish an Organized Retail Crime Coordination Center within Homeland Security and combine the forces of federal, state and local law enforcement to better fight ORC.
A number of states and regions have set up their own departments and programs, including Idaho, North Carolina, South Carolina, Nevada, Utah, Minnesota and San Diego, California.
“Shoplifting will always be here. I think that a level of professional and organized theft will always be here,” Johnston said. “But to see the frequency of events, to see the large-scale theft that we’re seeing today, we definitely need to curb those [with legislation].”