Target expects to take a $500 million hit this year due to missing inventory, and says shoplifting and organized crime is largely to blame

• Target says it expects to take a $500 million hit in profits this year because of missing inventory.
• It said that this is largely due to theft and organized crime.
• Retailers say that shoplifting is becoming a bigger issue and are taking steps to crack down on this.

Target is expecting to take a $500 million hit in profits this year due to missing inventory, and it's largely because of theft and organized retail crime, the company said.

In a statement announcing its first-quarter earnings results on Wednesday, Target CEO Brian Cornell said that while it is "making significant investments in strategies to prevent this from happening," it expects "inventory shrink" to make a big dent in profits this year. Cornell did not comment on what steps it was taking specifically to prevent theft.

Inventory shrink refers to when the company has fewer products on its shelves than what is reported in its inventory. These items could have been damaged, lost, or stolen.

Last November, the company said that missing inventory had cost it $400 million in profits so far that year and that this number could reach $600 million by year-end.

Theft and organized crime have been major talking points in the retail industry in recent years, as stores say it is becoming a bigger issue for them. They're beefing up security and introducing new theft prevention measures in response.

According to research from the National Retail Federation, retail shrink cost retailers $94.5 billion in 2021, up from $90.8 billion in 2020.

Still, there is some debate as to whether the severity of the situation has been over-inflated. Critics say retailers are often blaming theft for losses when they don't necessarily have a clear idea of what the cause of these losses is.