A Walgreens in Chicago redesigned a store that would allow customers to browse only two aisles of products because of crime.
Customers can only access those shelfs after they pass through anti-theft detectors.
The National Retail Federation said that shoplifting, which has skyrocketed in recent years, cost the industry almost $100 billion in 2022 alone.
Videos of shoplifting gangs across the country have gone viral online, with residents becoming increasingly frustrated about a wave of crime under the Biden administration.
For example, Walgreens closed five stores in San Francisco, California, in October 2021, citing organized shoplifting concerns and has become a political debate, especially in urban areas where crime is rising to levels not seen in years.
Store in Chicago to Be a Flagship for Future Security MeasuresThe store on 2 E. Roosevelt Road in the South Loop area of downtown Chicago was redesigned to include anti-theft devices for non-essential items and two shelves for essentials, protected by anti-theft devices without supervision.
The location reopened on June 6, after undergoing weeks of construction, and received mixed reviews from customers.
Block Club Chicago reported that a sign instructed shoppers to "place your order and relax" "and "let us do the shopping," while staff retrieved items for customers from shelves kept away from the public.
"We are testing a new experience at this store with new concepts, technologies, and practices to enhance the experiences of our customers and team members," a Walgreens spokesperson told Fox Business in a statement.
"It continues to offer retail products and pharmacy services, just with a new look and feel that focuses on shopping digitally for convenience.
"Inside the store, customers will find an area where they can pick up orders, digital kiosks for placing an order, as well as an area to shop for essential items," the spokesperson added.
One shopper told WBBM Newsradio, "It is nice that, for the essentials, you no longer have to call security to get them to open the glass case."
Another felt that the lack of trust was disappointing, saying, "We should be able to be trusted to go in without having to have cameras and people watching us and all that stuff."A few customers expressed their dislike of the kiosk-ordering system and would likely reduce their amount of visits.
"I'm not a huge fan of kiosk ordering. It's not going to make me come more often," one customer said.
CFO Admits That Shoplifting Fears Were OverblownThe redesign in Chicago came after Walgreens Boots Alliance admitted earlier this year that the drugstore chain may have overblown fears of organized retail theft in 2022 and would reduce expenditures on private security.
Instead of private security, Walgreens plans on other security alternatives that are more effective and less expensive.
"The security companies are proven to be largely ineffective," Chief Financial Officer James Kehoe said on an earnings call, explaining, "we're putting in more law enforcement as opposed to security companies."
"We've put in incremental security in the stores in the first quarter," said the Walgreens CFO.
Kehoe stated that the company may have spent too much on security measures.
"Actually, probably we put in too much and we might step back a little bit from that."
"Maybe we cried too much last year," Kehoe said and that shrinkage was 3.5 percent of sales in 2022, but has since fallen into the mid-twos.
"We're quite happy with where we are. It's around 2.5 percent to 2.6 percent. So that's well below the prior year levels," Kehoe added.
Walgreens Confirms CutbacksWalgreens confirmed that it would be slashing 504 corporate jobs in late May, equivalent to around 10 percent of its corporate workforce, The Deeep Dive reported.
Most of the affected positions are located at the company’s Deerfield and Chicago offices, which constitute approximately 1 percent of its total U.S. workforce.
The drugstore chain posted a net loss of $3 billion in the first half of the 2023 fiscal year, driven largely by a $5.4 billion aftertax charge related to opioid claims and class-action law suits.
Walgreens was found liable for damages last year for contributing to the opioid epidemic in San Francisco and reached a $230 million settlement with the city.