Walmart CEO did not warn theft could shutter company
Social media users claim Walmart chief executive Doug McMillon said the corporation would shutter if theft continues at its stores. This is misleading; while the head of the US retail giant addressed record shoplifting in a television interview, he did not warn of a potential companywide closure, which analysts say is unlikely.
"Walmart CEO Warns Company Will Close If Theft Doesn't Slow Down - Walmart Loses Rougly (sic) $3 Billion In Theft Every Year," says a December 9, 2022 tweet liked tens of thousands of times.
The claim was also shared on Facebook here and here. The rumor appears to stem from a December 6, 2022 interview that McMillon gave to the American cable news channel CNBC.
When "Squawk Box" co-anchor Becky Quick asked about retail theft, McMillon said it was "higher than what it has historically been" and that Walmart has implemented additional security measures.
"If that's not corrected over time, prices will be higher, and/or stores will close," he said in the interview.
However, Walmart spokesman Charles Crowson told AFP claims of a companywide closure are inaccurate, adding that McMillon "was speaking about retail in general and not specifically about Walmart."
Analysts agree that shoplifting is on the rise.
"Retailers are noting upticks in low-level theft, and that could be due to challenging economic conditions," said Sky Canaves, a senior analyst for retail and e-commerce at Insider Intelligence, a market research company. "At the same time, they are also noting an increase in incidents of organized retail crime, which is what I think they take as a bigger problem."
Inventory shrinkage -- including both internal and external theft, as well as other losses -- was about 1.4 percent on average in the 2021 fiscal year, according to data gathered by the National Retail Federation. For a company as big as Walmart, Canaves said that can equate to an "eight billion-dollar problem" per year.
Still, Walmart reported $572.8 billion in revenue for the 2022 fiscal year -- a 2.4 percent increase from 2021.
"As troubling as the rise in retail theft has become, Walmart is in no danger of going bankrupt because of it," said Carol Spieckerman, a retail analyst.
While McMillon did mention potential store closures due to theft, "shoplifting alone will not provide a rationale to close a store in most cases," Spieckerman said.
Neil Saunders, managing director of the retail division at GlobalData, a market analysis firm, agreed.
"Shoplifting will not cause Walmart fatal damage, but it could lead to higher prices," he said, "especially when Walmart's profits are already under pressure."
Hitha Herzog, a consumer spending expert, said that while theft is "significant," rising fuel prices and inflation are among the biggest pressure points for Walmart's bottom line.
AFP has debunked other claims about Walmart here.