Walmart, Target Push for New Shoplifting Crackdown in California

(Bloomberg) — Two of the nation’s largest retailers and a pair of Democratic mayors are supporting a campaign to roll back California’s landmark criminal justice reform, which has been blamed for a spike in retail theft.

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Walmart Inc. and Target Corp. are the top funders of a proposed ballot measure that aims to undo Proposition 47, a voter-approved law from 2014 that reduced penalties for many lower-level drug and property crimes in the state.

The latest initiative would give prosecutors more power to charge accused thieves as felons and force drug users into treatment with the threat of jail time, said Greg Totten, head of the California District Attorneys Association, which is spearheading the effort.

The campaign has gained the support of San Francisco Mayor London Breed and San Jose Mayor Matt Mahan, who represent two of the most liberal cities in the US. Their backing reflects a growing frustration felt by the public and city leaders with the consequences of Proposition 47, which some say has emboldened criminals.

Critics point to a recent wave of smash-and-grab robberies at department stores and the prevalence of open-air drug use on city streets as evidence of the law’s shortcomings. In September, Target closed three California locations as well as six stores in other states, citing crime.

Proposition 47 was a “well-intentioned initiative” that has had “significant unintended consequences,” Mahan said at a press conference this week. “A small number of people brazenly commit crimes without fear of accountability. People are so trapped in addiction that they refuse services and subsist in misery on our streets.”

Read More: Thieves Swarm Luxury Malls, Driving Surge in Retail Crime

Other large backers of the campaign include a prison-guard union, Macy’s Inc., and businessman and political donor William Oberndorf, who was a major contributor to a 2022 recall effort that ousted San Francisco’s progressive district attorney, Chesa Boudin.

The mayors’ stance puts them at odds with other Democratic leaders in the state, including Governor Gavin Newsom. Supporters of Proposition 47, who include civil rights groups, public defenders and some law enforcement officials, credit the decade-old law for slashing incarceration rates, reducing racial disparities in arrests and cutting prison costs. The measure has also funneled funds to effective crime prevention programs, they say.

Retail Theft

US retailers say they have suffered an increase in inventory losses, known as shrink, due in part to organized retail crime, which targets both high-end goods and everyday items like toothpaste and baby formula.

According to a study last year by the National Retail Federation, a trade group that includes Walmart and Target, shrink rose to 1.6% of sales in 2022, up from 1.4% the previous year, but in line with the two years before that. That worked out to about $112 billion in lost merchandise, and theft — both external and internal — accounted for almost two thirds of the total. Shrink also includes losses from damage and administrative error.

Los Angeles and San Francisco topped the list of US metro areas most affected by organized retail crime, followed by Houston and New York, the trade group said. Sacramento, California, also ranked in the top 10.

The California ballot measure would allow prosecutors to add up separate thefts to surpass the $950 threshold for felony charges. It would also ramp up sentencing for people working as a group to steal goods or for taking more than $50,000 in property. Additionally, the reform would authorize prosecutors to charge drug users with a felony on a third offense, in a move supporters say is meant to force people addicted to drugs into rehabilitation programs.

The initiative needs 546,651 valid signatures to qualify for the November 2024 election. It currently has more than 360,000, according to a statement this week by backers of the effort.

Walmart, which has donated $1 million to the ballot initiative, said it supports policies intended to improve safety for its employees, customers and communities. A spokesperson for Target, which has given $500,000, declined to comment and referred questions to the California District Attorneys Association.

–With assistance from Jaewon Kang.

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