The new normal is hurting retailers and not just the ones in San Francisco. Yahoo News notes that Walmart, Home Depot and Walgreens all mentioned retail theft or “shrink” as one of the headwinds they were facing last quarter.

On Wednesday, Target CEO Brian Cornell said the retailer is up against “an unacceptable amount of retail theft and organized retail crime.”…

“Shrink in the second quarter remained consistent with our expectations but well above the sustainable level where we expect to operate over time,” Cornell said in the company’s Q2 earnings call.

As Beege pointed out last week, Target may have some other problems that caused them to miss their sales expectations, but there’s no doubt that retail theft is also a problem at some of there stores. In May the SF Standard reported a Target located in San Francisco was experiencing 10 retail thefts per day. Each one of those thefts is costing the store hundreds of dollars. Do that every day and it’s going to quickly eat into any profit the store might be earning.

And as mentioned, Walmart and Home Depot are seeing the same thing:

Walmart US CEO John Furner echoed that sentiment, saying: “Shrink has increased a bit this year. It increased last year. It’s uneven across the country.”

Retail theft weighed profit margins too. Just ask Home Depot.

“In the second quarter, our gross margin was 33%, a decrease of 8 basis points from the second quarter last year, primarily driven by pressure from shrink,” Home Depot CFO Richard McPhail said on the earnings call. “Shrink has been a consistent pressure over the last several quarters and even the last few years. It’s something we’re tackling every day.”

David Johnston, Vice President of the National Retail Federation, told Yahoo News, “The retailers are not crying wolf. They are highlighting a major issue out there.” He added, “What we’re seeing today requires the government, the community, the retailer, everyone, … including the consumer, to take action.”

But of course that’s not what is happening. On much of the west coast, retail theft is now a misdemeanor which doesn’t lead to an arrest or prosecution most of the time. Police forces in too many west coast cities are dealing with the fallout from “defund the police” and can’t spare officers to deal with preventing shoplifters. And the thieves clearly know it. This may have started during the pandemic when regular shopping patterns were disrupted but it’s worse this year than it was last year and the pandemic is over.

Tony Sheppard, a loss prevention consultant who has worked in the industry for 25 years told Newsweek the nature of shrink had changed.

Sheppard said the proportions of the sources of shrink had changed drastically over the last 10 years, going from “internal theft”—employees taking items—being the most predominant cause of inventory loss to external theft by organized criminal gangs.

“External theft…was a small chunk; it was always there, but it was a smaller piece of the pie,” Sheppard said. “What’s happened is, is that with the increase in organized retail crime, the sheer volume of product that an individual or group can take in any given day has just gone crazy.”

In the past, thieves had to find a fence who would pay them pennies on the dollar for random items. Now they can deliver goods directly to resellers who put items for sale on Amazon or Craigslist at nearer the list price. The pandemic turbocharged online buying which meant there was strong demand for stolen goods. It all adds up to shoplifting being a pretty easy way to get by these days.

“Your return on investment for being a shoplifter—especially a professional shoplifter who does it all the time—is way more lucrative than it used to be,” Sheppard said. “It’s much easier to resell the product, and the profit margin you’re getting per item has just skyrocketed because of online platforms.”

Organized retail theft may not be as profitable as drug dealing but it’s a lot safer line of work for the thieves. So we’re probably not going to see things return to normal anytime soon. In fact, this is the new normal. We’re stuck with this until cities, counties and DAs get serious about stopping it.