Walgreens CEO says stopping shoplifting is like a 'hand-to-hand combat battle'
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- Walgreens' CEO said the company is taking "creative" steps to address shoplifting and shrink.
- While anti-theft measures can be effective, they can also hurt a store's sales, CEO Tim Wentworth said.
- The pharmacy chain is in the midst of a multi-year turnaround effort to revive its retail business.
When it comes to its retail business, Walgreens faces a tradeoff when it comes to locking up items behind anti-shoplifting displays.
The Illinois-based pharmacy chain has long been one of the more vocal companies raising concerns about shoplifting in its stores — and its CEO said that the challenges continue.
In prior quarterly earnings calls, Walgreens executives mentioned "higher shrink" — or missing inventory — as a drag on profitability.
While the term didn't garner a mention in prepared remarks for Walgreens' fiscal first-quarter earnings call on Friday, CEO Tim Wentworth said in a call with analysts that the work to minimize shoplifting "is a hand-to-hand combat battle still, unfortunately."
The CEO also said the company's asset protection team is taking "creative" steps to address the issue in an effort to better avoid negative customer experiences.
"When you lock things up, for example, you don't sell as many of them," he said. "We've kind of proven that pretty conclusively."
Other companies are exploring additional ways to combat retail theft.
Walmart, for example, is testing technology with employees that allows them to use an app to unlock items protected behind anti-shoplifting displays. The retail giant is also piloting body cameras for front-line store workers at some Texas locations. T.J. Maxx has implemented body cameras for some employees as well.
Meanwhile, Walgreens is in the midst of a multi-year turnaround effort to revive its retail business.
American drugstores in general are in a tough spot as customers increasingly turn to options that have lower prices, better choices, and more convenience.
With Walgreens continuing to close underperforming stores and reinvest in successful locations, Wentworth said the company is testing out new systems to improve the in-store customer experience, like a digital check-in for prescription pick-up.
The CEO said the company is working on "getting to the right number of stores so that we can invest in them properly for the customer experience that needs to be — frankly, in too many of our stores — improved."
Walgreens delivered a big earnings beat on Friday, and its stock closed up over 27%.
Wentworth said the results reflect the company's "disciplined execution."
"While our turnaround will take time, our early progress reinforces our belief in a sustainable, retail pharmacy-led operating model," he said.