A spike in retail theft and other property crimes in California might be causing some businesses to lose their insurance.
A Blow to California Commerce?
On Wednesday, Governor Gavin Newsom of California met with Oakland’s community leaders to address statewide crime issues. KRON-TV in San Francisco reports that these leaders included Oakland’s Chamber of Commerce President, Barbara Leslie.
Business Survival in Crime’s Shadow
She highlighted the issue of small businesses in Oakland losing their insurance due to repeated retail theft and property crimes, stating, “Insurance was brought up as an opportunity to ask the governor to help with organizations and businesses that are losing their insurance because that is a really financial impact on small businesses that we need to address.”
A Soaring Concern
This comes amid rising discussions about increasing retail theft and shoplifting throughout California, with the Public Policy Institute of California reporting a 28.7% surge in commercial shoplifting in 2022 compared to the previous two years.
The Cost of Crime
In September 2023, Target also announced the closure of several of its California stores, explaining in a statement, “In this case, we cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance.”
Can Tougher Penalties Save Retail?
Governor Gavin Newsom of California recently revealed new strategies to tackle retail theft and other property crimes, including harsher criminal penalties and enhanced police action.
Ramping Up Against Theft
In December, Newsom’s office revealed a significant uptick in efforts against organized retail theft by the California Highway Patrol, with a 310% increase in response throughout 2023.
More Arrests than Ever
Additionally, arrests related to retail theft jumped by 109%, according to the governor’s office. “As reports of organized retail crime increase nationally, California is meeting the moment by leading more takedowns and making more arrests than ever before,” the governor stated.
Oakland’s Crime Woes
A Newsweek spokesperson for Newsom’s office said, “Building on the Governor’s efforts to improve public safety and quality of life in Oakland, Governor Newsom convened Oakland community leaders to listen to their firsthand concerns about an uptick in crime and blight in the city.”
Community Concerns
The spokesperson added, “Throughout the productive conversation, the Governor heard about community concerns and expressed his continued commitment to strengthen public safety and support the people of Oakland.”
Small Business Crisis?
In April 2023, a Fresno small business owner shared with KMPH that her store, Lupita’s Boutique, was refused insurance after four retail theft claims. She expressed her distress, saying, “It gets to you, it makes me sad about what’s happening, but we have no choice but to get up every day, leave it in God’s hands, and keep giving it your all.”
LA Leads in Retail Crime
According to the National Retail Federation’s annual report, three California cities are among the top U.S. cities most affected by organized retail crime. For the fifth consecutive year, Los Angeles has maintained its position as the number one city impacted by this issue.
Not Just LA’s Problem
Following closely, the San Francisco Bay Area holds the second spot for the third year in a row, while Sacramento has also made the list, ranking seventh.
Alarming Trends
The 2023 Retail Security Survey, which analyzed 177 retail brands representing over 97,000 retail locations across the U.S. and accounting for $1.6 trillion in annual sales in 2022, revealed an increase in the “shrink rate” (inventory loss) from 1.4% in 2021 to 1.6% in 2022.
Beyond Big Brands
The NRF’s report highlighted the ongoing challenge of retail crime, violence, and theft, stressing that these criminal activities are not just confined to big national brands or major cities.
Defining Organized Retail Crime
The NRF defines organized retail crime as theft or fraud activities aimed at converting illegally obtained goods, cash, or equivalents into financial gain.
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