In a startling declaration, Walmart’s top executive has notified thieves: shape up or watch your local stores ship out. Doug McMillan, the CEO of the retail juggernaut, didn’t pull any punches during a recent CNBC interview, where he laid bare the growing menace of theft plaguing the company’s operations.

McMillan’s message was crystal clear: if the current wave of shoplifting doesn’t recede, Walmart will have no choice but to pull down the shutters on stores across the nation. “Theft is an issue,” he stated bluntly, adding that the problem has surged beyond its typical levels. Should this trend continue unabated, the consequences are twofold and equally unpalatable: “Prices will be higher, and stores will close.”

To put the scale of the problem into perspective, consider this: Walmart, the colossus of the retail world, is hemorrhaging approximately 1% of its stateside revenue annually due to sticky-fingered customers and light-fingered employees in cold, hard cash, which translates to a staggering $3 billion vanishing into thin air each year. These figures, unearthed by Routers back in 2015, paint a sobering picture of the challenge facing the retail behemoth.

But how does Walmart plan to stem this tide of theft? McMillan’s strategy hinges on collaboration. The CEO emphasized the importance of Walmart joining local law enforcement agencies. He stressed the need for these agencies to fire on all cylinders, suggesting that a robust police presence could be a powerful deterrent to would-be shoplifters.

Interestingly, McMillan opted to keep his cards close to his chest regarding specifics. He didn’t disclose how much Walmart’s bottom line has been dented by theft in the current year. Instead, he emphasized the localized nature of the issue, noting that it varies significantly from “city to city, location to location.” This nuanced approach suggests that Walmart is tailoring its anti-theft strategies to the unique challenges faced by each store.

The retail giant’s relationships with local law enforcement agencies were described by McMillan as “great… for the most part.” This collaborative approach is the linchpin of Walmart’s strategy to combat theft, with store managers working with police to tackle the problem at the grassroots level.

However, Walmart isn’t the lone soldier in this battle against retail crime. Target, another heavyweight in the retail arena, is also grappling with the scourge of theft. The company reported that inventory shrinkage has taken a sizeable chunk out of its gross margin, to the tune of over $400 million in 2022 compared to the previous year. Even more alarmingly, Target anticipates these losses to balloon to an eye-watering $600 million by the fiscal year’s end.

During a November earnings call, Target’s Chief Financial Officer, Michael Fike, didn’t mince words. He squarely blamed the inventory shrinkage on a “significant increase in theft and organized retail crime” across the company’s operations. This sentiment was echoed by Target’s CEO, Brian Cornell, who, like his Walmart counterpart, warned of potential store closures and price hikes if the theft situation doesn’t improve.

Despite these formidable challenges, it’s worth noting that Walmart has thus far managed to keep widespread, long-term store closures at bay. This resilience in the face of mounting losses speaks volumes about the company’s resources and strategic acumen. However, it also begs the question: how long can even a retail giant like Walmart weather such significant financial storms before taking more drastic measures?

As the retail landscape evolves, theft looms, casting a shadow over the industry’s future. The stark warnings from industry titans like McMillan and Cornell serve as a wake-up call, highlighting the delicate balance between profitability and accessibility in the retail sector.

If left unchecked, this rising tide of theft threatens to reshape the retail landscape dramatically. Consumers could face a double whammy of fewer shopping options and higher prices. The coming period will prove crucial in determining whether retailers and law enforcement can successfully turn the tide against this wave of organized crime and petty theft.

As it stands, the ball is in the court of would-be thieves. Walmart’s message is clear: curb the stealing, or watch your local stores disappear. It’s a high-stakes game of retail roulette, and the next move could determine the future of shopping as we know it.