Home Depot says opioid crisis may be contributing to theft
'This is happening everywhere in retail'
Home Depot says an increase in theft may be linked to burgeoning abuse of opioids like heroin and fentanyl in the United States.
“We think this ties to the opioid crisis but we’re not positive about that,” Home Depot Chief Executive Officer Craig Menear said at an investor and analyst conference Wednesday. “This is happening everywhere in retail."
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The National Retail Federation said shrink related to theft and fraud rose 8.1 percent in 2019 to $50.6 billion. The report did not break out what percentage of that shrinkage was the result of shoplifting.
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Meaner mentioned one case in which $15.5 million of goods were stolen from multiple retailers sharing a warehouse – $1.4 million of which belonged to Home Depot.
The home-improvement retailer expects its operating profit to fall to about 14 percent during fiscal year 2020 with the “most significant impact” coming from shrink, according to Richard McPhail, the company’s chief financial officer.
The National Institute on Drug Abuse estimates 1.7 million Americans suffered from substance abuse related to prescription opioid pain relievers in 2017 and another 652,000 Americans suffered from heroin abuse. Statistics on the correlation between opioid use and theft weren't immediately available.
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Shares of the home-improvement retailer have rallied more than 25 percent this year, matching the S&P 500’s gain.