Social media users claim Walmart CEO Doug McMillon said the corporation would go out of business if thefts continue at its stores. This is misleading; While the head of the US retail giant referred to the record theft in a television interview, he did not warn of a possible company-wide shutdown, which analysts say is unlikely.
“Walmart CEO Warns Company Will Shut Down If Theft Doesn’t Slow Down – Walmart Loses Approximately $3 Billion In Theft Every Year,” reads a December 9, 2022 tweet that was liked tens of thousands of times.
Screenshot of a tweet taken on December 12, 2022
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-host Becky Quick asked about retail theft, McMillon said it was “higher than it’s been historically” and that Walmart has implemented additional security measures.
“If that is 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 that claims of a company-wide shutdown are inaccurate, adding that McMillon was “talking about retail in general and not Walmart specifically.”
Analysts agree that shoplifting is on the rise.
“Retailers are noticing increases in low-level theft, and that could be due to difficult economic conditions,” said Sky Canaves, a senior retail and e-commerce analyst at Insider Intelligence, a market research firm. “At the same time, they’re also noticing an increase in organized retail crime incidents, which is what I think they see as a bigger problem.”
Inventory shrinkage, including internal and external theft as well as other losses, was about 1.4 percent on average in fiscal 2021, according to data compiled by the National Retail Federation. For a company as large as Walmart, Canaves said that can equate to an “eight billion dollar problem” per year.
Still, Walmart reported $572.8 billion in revenue for fiscal 2022, up 2.4 percent from 2021.
“As concerning 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 mentioned potential store closings due to shoplifting, “shoplifting alone will not provide a reason to close a store in most cases,” Spieckerman said.
Neil Saunders, managing director of the retail division of GlobalData, a market analysis firm, agreed.
“Shoplifting won’t do fatal damage to Walmart, 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 the 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.
