For several years, Walgreens and other major retailers have been sounding the alarm about an alleged spike in shoplifting, describing it as an existential threat to their business. These dramatic claims generated a nationwide media frenzy.

Now, Walgreens is quietly backtracking. 

In a conference call with investors on January 6, Walgreens Chief Financial Officer James Kehoe was asked how shoplifting and related problems impacted the company's financial performance. Kehoe admitted that “maybe [Walgreens] cried too much last year” about the issue, adding that the drugstore chain probably spent “too much” hiring private security companies.

Kehoe added that theft at Walgreens had “stabilized” and the company was "quite happy with where we are." Walgreens’ “shrink” — an industry term for inventory losses from theft, damage, or administrative errors — had gone down from 3.5% of sales last year to roughly 2.5% in its last quarter. Walgreens declined to specify how much of the "shrink" was due to shoplifting as opposed to other causes, like employee theft and damaged goods. Across the industry, "external theft" accounts for only one-third of total shrink. That means shoplifting at Walgreens likely amounts to less than 1% of sales.

But Kehoe’s upbeat comments gloss over Walgreens’ central role in fomenting the national panic over retail theft. Just a year ago, Kehoe said that part of the reason Walgreens’ reported lackluster earnings was because of “gangs that actually go in and empty our stores of beauty products.” 

“This is not petty theft,” Kehoe insisted at the time. “It's not somebody who can't afford to eat tomorrow.” 

Walgreens has been joined by other major retailers who have been echoing similar cries and drumming up fear: Walmart CEO Doug McMillion warned that Walmart may have to raise prices or close stores because theft was “higher than what it has historically been.” Former Home Depot CEO Bob Nardelli stated on national television that retail theft was “spreading faster than COVID.”

Publicly available data, however, contradicts the theft-wave narrative. The number of shoplifting offenses dropped 46 percent between 2019 and 2021, according to the FBI’s crime data explorer. The National Retail Federation (NRF), a trade group that represents retailers like Walgreens and has amplified the theft-wave narrative, has also found that shrink declined to 1.4% of total retail sales in 2021, from 1.6% in 2020. External theft, the NRF found, made up 0.5% of total retail sales in 2021. 

In response to a request for comment, Walgreens sent Popular Information the following statement: "Although we are pleased to see retail shrink levels stabilize, this is still a serious national problem affecting us all and all retailers. We have taken a number of steps to address this issue and, most importantly, protect the safety of our customers and team members, including our highly-valued partnerships with law enforcement and security professionals."

So although Walgreens continues to describe retail theft as a "serious national problem," Kehoe was clear that it is not preventing Walgreens from being a profitable company. And yet the company reported a net loss of $3.7 billion in its most recent quarter. Why? The company took "a $5.2 billion after-tax charge for opioid-related claims and litigation." That litigation stems from Walgreens' role in fueling the opioid epidemic by filling illegitimate prescriptions for highly-addictive pain medication. 

What happened in San Francisco

In May 2021, Walgreens told the New York Times “that thefts at its stores in San Francisco were four times the chain’s national average, and that it had closed 17 stores, largely because the scale of thefts had made business untenable.” 

Months later, the retailer announced the closure of an additional five stores in San Francisco and told the San Francisco Chronicle that “organized retail crime continues to be a challenge facing retailers across San Francisco, and we are not immune to that.” The company said it had to increase investments in private security in San Francisco by “46 times our chain average in an effort to provide a safe environment.”

When the company announced it was closing five stores in San Francisco due to rampant theft, police data obtained by the San Francisco Chronicle revealed that “the five stores slated to close had fewer than two recorded shoplifting incidents a month on average since 2018.” Moreover, the company’s claims that thefts at its San Francisco stores were four times its national average were not reflected in citywide crime data — in 2020, shoplifting had reached its lowest level since they began collecting data in the 1970s. 

Moreover, back in 2019, Walgreens announced it would close 200 stores across the U.S. as part of a larger “cost-reduction” plan. The San Francisco Chronicle, in 2021, raised the question of “whether a $140 billion company was using an unsubstantiated narrative of unchecked shoplifting to obscure other possible factors in its decision." 

How Walgreens played the media

Mainstream media has historically gravitated toward sensationalist crime coverage that often obscures reality. With Walgreens, a similar pattern emerged: the drugstore chain’s dubious narrative was spread unchecked by some of the largest news organizations in the country. 

One of the first viral stories on Walgreens’ alleged theft issue was published by the New York Times’ San Francisco Bureau Chief Thomas Fuller in May 2021. “The mundane crime of shoplifting has spun out of control in San Francisco, forcing some chain stores to close,” read the subhead. In the piece, Fuller recounts a time in 2016 he saw a man grab “a handful of beef jerky” and walk out of a Walgreens. Based on this five-year-old anecdote and a statement from Walgreens, Fuller declared a “shoplifting epidemic” and called into question a sentencing-reform measure that reduced some thefts from felonies to misdemeanors. The piece, notably, does not include any data on crime rates in San Francisco. 

The New York Times’ coverage of Kehoe’s comments acknowledged that “Walgreens received national attention in October 2021 when it announced that it was closing five stores in San Francisco, citing shoplifting as the reason for the closures.” The story acknowledges how Walgreens’ shoplifting claims “fed into political debates about crimes.” The piece, however, fails to mention the critical role the Times itself played in amplifying Walgreens’ claims without supporting evidence. 

Since May 2021, the New York Times has published at least six stories warning readers of retail theft. Over the same time period, other outlets provided even more voluminous coverage of the issue. The Wall Street Journal published at least 13 stories on the retail theft “epidemic”, including four from its editorial board. CNN published at least seven articles on the “wave” of retail theft. And Business Insider published at least 18 stories on how retail theft has “ballooned” into a billion dollar problem for companies. According to the Center for Just Journalism, the number of stories featuring the keywords “organized retail crime” or “organized retail theft” increased by more than 270% between 2020 and 2021. 

The overblown claims in this media coverage have political consequences. Walgreens’ theft concerns was “a flash point in a stinging criminal justice debate that helped electrify the recall of former San Francisco District Attorney Chesa Boudin.” California Republican Chair Jessica Millan Patterson wrote in an op-ed that the Walgreens closures were evidence that “Democratic policies have created a crime spike.” Boudin was removed from office by voters in June 2022.