Walgreens cited shoplifting as rationale for closing 5 stores in San Francisco, but local officials, data, and experts cast doubt on that explanation

Customers see products in locked security cabinets at Walgreens in San Francisco. The store will close in the next few weeks, on October 13th 2021. Photo by Justin Sullivan/Getty Images
Walgreens announced that it is closing several San Francisco locations due to an increase in retail theft.

The Chronicle was unable to find any high shoplifting rates at closing stores from police data.

According to one expert, Walgreens could have suffered if people moved out of the city during the pandemic.

Walgreens announced Tuesday that it would close five of its San Francisco stores due to "organized criminal activity." But, data from the police, local officials and policy experts cast doubt on this reasoning according to a San Francisco Chronicle report.

The report stated that the chain had suffered retail theft. However, other factors such as the COVID-19 pandemic or oversaturation of shops were also cited as possible reasons for closing the stores.

Phil Caruso, spokesperson for Walgreens, stated that retail theft has increased by fivefold in San Francisco over the last few months.

The Chronicle obtained data from the San Francisco Police Department that contradict Walgreens' claims. One of the stores to be closed reported only 23 shoplifting incidents between 2018 and 2018. While shoplifting incidents may not be reported in all cases, the average number of shoplifting reports from closing stores was less than one per month since 2018.

Caruso stated that organized retail crime is still a problem for retailers in San Francisco. To combat this problem, we increased our security investments in the city's stores to 46 times that of our average chain in an effort create a safe environment.

London Breed, the San Francisco Mayor, resisted Walgreens' claims of closing the stores.

She said that shoplifting was the main reason but that she also believes that a place doesn't generate revenue and that a place is saturated - SF has a lot Walgreens locations throughout the city - so she did not deny that other factors could play a role.

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Dean Preston, the supervisor for San Francisco's 5th District, stated that the pharmacy chain is abandoning the community and had "long planned" to close the stores, according to the San Francisco Chronicle.

Preston tweeted, "Oddly that some are so offended that they might suggest that a huge corporate chain might be closing retailers for the exact reason that they told investors that they would close locations," on Friday.

Walgreens, in a filing to the 2019 Security and Exchange Commission, announced that it would launch a Transformational Cost Management Program. This program would see 200 US stores close in order for $1.5 billion annual savings by 2022.

Nicholas Bloom, a Stanford economist, published a May study that found 15% of San Francisco residents fled during the pandemic. He explained to the Chronicle that this could be why Walgreens has lost its customer base.

Property crime rates are high in San Francisco, according to Magnus Lofstrom, a criminal justice researcher. This could be partly due to the large income inequality of the Bay Area.

Insider reached Walgreens for comment but they did not respond immediately.

Business Insider has the original article.