How Best Buy is winning the war against retail theft

• Target, Walmart, Dick's, and other major retailers have sounded alarms on rising retail theft.
• But Best Buy said Tuesday that theft at its stores has remained relatively stable.
• The CEO attributed this in part to stores having only one entrance and few self checkouts.

Target, Walmart, Dick's Sporting Goods, and other major retailers have been sounding alarms over the last year about rising rates of retail theft.

But Best Buy said Tuesday that its rate of shrink — or losses due to theft, fraud, or other causes — has remained relatively stable over the last several years.

In certain parts of the country, the company is "definitely seeing an increase" in break-ins and thieves "just grabbing" goods and "running out," Best Buy CEO Corie Barry said Tuesday on a call with analysts. But shrink as a percentage of Best Buy's overall revenue is nearly where it was pre-pandemic, she said.

By comparison, Target recently said shrink is on track to cost the company $1.2 billion in 2023, up from $500 million last year. Dick's last week blamed rising theft, in part, for a 23% quarterly drop in profits. Walmart's CEO has said stores would close if theft didn't slow and Dollar Tree said in May that it was considering locking up more goods to prevent theft.

On Tuesday's call, Barry rattled off a list of strategies that she said has helped Best Buy combat theft.

Best Buy employs security workers at store entrances

Barry said Best Buy employs asset-protection employees at its front doors. These are staffers who are specially trained to handle security threats, such as theft.

Notably Costco, which also employs staffers at its store entrances and exits, said in May that it hasn't seen any major spikes in shrinkage.

Barry added that Best Buy "often" has more "floor coverage" than other retailers — meaning more employees are present on the sales floor.

"We just have more employees in our stores and they just do an exceptional job of watching out over our stores," she said.

Best Buy stores have one entrance and few self-checkout registers

Barry highlighted other features of Best Buy's stores as theft deterrents.

"We usually just have one entrance in our stores, we tend to have less self-checkout, and we have a very high digital penetration at 33%," she said, referring to the share of sales completed online versus in stores.

Fewer entrances mean fewer options for thieves to escape with carts of stolen goods. And self-checkout is often blamed as a driver of theft.

Matt Kelley, a loss-prevention expert at the security-solutions company LiveView Technologies, told Insider last year that self-checkouts can save on labor, "But inherently, that means there's going to be less eyes on a transaction. And there's going to be more of an opportunity for the dishonest people to be dishonest."

Costco CFO Richard Galanti said in May that the warehouse chain saw a slight uptick in shrinkage after rolling out self-checkout registers three years ago, though he said rates later normalized.

Best Buy is locking away some merchandise

Barry said Best Buy has started removing some items from the sales floor that could be prime targets for thieves.

The company has invested in displays and digital tools in stores that allow customers to scan items for pickup within minutes. She said this "allows for a much better merchandising experience for products that we have deemed more at risk for shrink and have decided to hold inventory in a more secure location off the sales floor."

More broadly, she said Best Buy has kept a handle on theft because it has been a focus of the company for years.

"Given the high-ticket nature of what we sell, we've been addressing shrink aggressively for honestly many, many years," she said. "It's really embedded in the culture."