U.S. retailers and some municipal officials say a sharp rise in retail crime since 2019 has translated into billions of dollars in losses, store closures and higher commercial vacancy rates that threaten local tax bases and jobs.
The National Retail Federation reported that U.S. retailers lost $112 billion to theft in 2022, up from $94 billion the year before, and that retailers surveyed recorded a 93 percent increase in the average number of shoplifting incidents per year in 2023 versus 2019. The federation also reported a roughly 90 percent increase in dollar losses tied to shoplifting over that same period.
Large chains and analysts say the losses have prompted changes in how businesses operate in some urban cores. Target projected an additional $500 million in losses this year attributable in part to organized retail crime, and national pharmacy and apparel chains have reduced footprints in high-crime neighborhoods, according to news reports and company statements cited by industry observers. Walgreens has closed dozens of San Francisco stores, and some retailers have limited in-store merchandise access or retreated from downtown locations, officials and industry sources said.
Local economic indicators cited by business groups show signs of strain. San Francisco’s downtown commercial vacancy rate has been reported as high as 34.8 percent in recent counts, and some industry analysts say declining foot traffic and higher security costs have contributed to decisions to close or relocate stores. Retail executives and some city officials link those trends to lower sales tax receipts, reduced payrolls and fewer customers for nearby businesses.
Beyond direct retail losses, city leaders and advocates for business-friendly policies warn of broader fiscal effects. Lower property values in neighborhoods affected by persistent crime can reduce property-tax revenue, while declines in tourist visits and convention business can lower hotel and sales taxes that fund municipal services. A projection cited in media reports estimated New York City could see about 2 million fewer international visitors in a given year, with an associated loss in foreign tourism dollars previously estimated in the billions; the city’s tourism and finance offices publish data that officials and analysts use to calculate potential impacts.
Policymakers and advocates present differing views on causes and solutions. Some local business leaders and elected officials have blamed enforcement practices and policy decisions in cities where arrests and prosecutions for certain offenses have declined, arguing that reduced penalties and limited enforcement capacity have emboldened organized retail theft and other crimes. Those critics, including some local politicians and national commentators, say restoring stricter enforcement and targeting organized retail crime could help stem losses and stabilize downtown economies.
Other stakeholders point to broader socioeconomic factors such as substance use, mental health crises, homelessness and long-standing economic inequality as underlying drivers of property and violent crime. Advocates for criminal justice reform and some municipal leaders say addressing those root causes through investments in social services, treatment programs and housing is necessary alongside targeted enforcement to produce sustained public-safety improvements.
Public-safety spending patterns have become a focal point in municipal budgets and political campaigns. In New York City, for example, public-safety costs such as police overtime and incarceration expenses are frequently cited in budget debates; published estimates of the daily cost to incarcerate an individual in the city are used in fiscal analyses, and overtime outlays have increased in some years as departments respond to staffing and operational pressures. Debates over police funding, staffing and the scope of enforcement continue to figure prominently in mayoral and city council races.
Retailers and local chambers of commerce are also lobbying for federal and state action to address organized retail crime. Proposed measures include tougher penalties for coordinated theft rings, improved data sharing between retailers and law enforcement, and targeted task forces. Law enforcement officials in several jurisdictions have announced operations aimed at disrupting organized theft networks, though outcomes and the scale of those efforts vary by city.
Analysts caution that data on retail theft and overall crime can be affected by reporting practices, changes in consumer behavior, and differences in how jurisdictions classify offenses. The National Retail Federation survey aggregates responses from a range of retailers and is among several data sources used to assess trends; police crime statistics, business surveys and municipal economic reports can show different patterns depending on methodology and timeframe.
The intersection of public safety, urban economics and electoral politics means the issue is likely to remain prominent as cities seek to balance enforcement, social services and economic recovery. With retail executives adjusting store strategies and some downtown neighborhoods showing sustained vacancies, city officials face pressure to present data-driven plans that address immediate security concerns while also tackling longer-term social and economic drivers of crime.
Officials, business leaders and advocates say further analysis is needed to disentangle the effects of policy changes, the pandemic-era economic shift, and organized criminal activity on retail losses and urban economic health. Until then, the dispute over causes and remedies continues to shape policy debates in cities across the United States.