Walgreens says locking up shampoo and toothpaste hurts sales, but will continue

 Shoppers can’t stand when toothpaste, deodorant, and other items are locked up behind glass display cabinets at stores. Customers, accustomed to taking whatever they want off a shelf, don’t like to push a button on the display case and impatiently wait for an employee to come open it so they can buy something for $5.

It's no surprise, then, that locking up products leads to lower sales for retailers.

“When you lock things up, for example, you don’t sell as many of them. We’ve kind of proven that pretty conclusively,” Walgreens CEO Tim Wentworth said on an earnings call this month.

But the company plans to keep doing it anyway.

That’s because “it is a hand-to-hand combat battle still” to stop merchandise from being stolen, Wentworth said. Walgreens is looking at “creative things” to stop theft without resorting to locking up products, Wentworth said, but he didn’t “have anything magnificent to share” yet.

Walgreens and other retailers are trying to balance deterring theft with making stores easy to shop. Companies must walk a delicate line between protecting their inventory and creating stores that customers don’t dread visiting. Chains are willing to accept lower sales that result from locking up some products rather than lose the products to shoplifters, which hits their profits, analysts say. It’s also cheaper for them to lock up products than add more employees, security and other major investments that may limit theft but make the store unprofitable to operate.

A Walgreens spokesperson told CNN that locked display cases were the “most efficient solution to combat retail theft.” The company “continuously review(s) the impact of these actions on sales” and tests new strategies to protect inventory and make it easier for customers to access products, the spokesperson said.

Wentworth’s comments quickly spread on social media.

“Walgreens management realizing no one wants to wait 12 minutes for assistance opening unlocking my $4 deodorant,” one user wrote on X. “I don’t want to press the button. I don’t want to find you. I just want to go grab some deodorant and check out…If I see it locked up I leave,” another posted on TikTok.

And analysts say putting merchandise under lock and key isn’t a long-term solution. It keeps customers away – and possibly sends them into the waiting shopping carts of online retailers like Amazon. Amazon CEO Andy Jassy said last year that the “tough experience” of going into a store with locked-up products was pushing people to shop online.

“Locking a lot up is not a good strategy,” Scott Mushkin, a retail analyst at R5 Capital, told CNN. “Why go to a store if you have to wait for someone to open up the case? It’s a blunt tool and self-defeating.”

Shoplifting trends

Walgreens and other retailers began locking up more products during the pandemic in response to small shoplifting offenses andlarger, more violent incidentsof people swiping entire shelves of merchandise. Sometimes these crimes were part of organized groupsreselling the stolen merchandise online.

Videos of thieves smashing store windows and grabbing merchandise rocketed across the news and social media. The issue became highly politicized: President Donald Trump called for shoplifters to be shot, and lawmakers in both political partiesvowed to crack down.

But the narrative that shoplifting exploded nationwide may have been unfounded. Some retail analysts have suggested companies may have inflated the impact of theft to mask other problems. William Blair analysts last year suggested that chains had “overexaggerated” the impact, using it as an excuse for inventory mismanagement and strategic mistakes.

In 2023, Walgreens’ then-chief financial officer James Kehoe indicated the company may have gone too far: “Maybe we cried too much” about theft and other losses, he said.

Still, the shoplifting rate during the first half of last year in major cities was 24% higher, on average, than the same period last year, according to a recent analysis by the Council on Criminal Justice, a nonpartisan criminal justice policy organization. The shoplifting rate in the first half of 2024 was also 10% higher than in the first half of 2019. It was unclear how much of the change was due to a rise in shoplifting incidents themselves or an increase in businesses reporting incidents to law enforcement.

Retailers have taken other steps to minimize theft and prevent losses, such as adding security guards, removing self-checkout stations and, in some cases, equipping workers with body-worn cameras. Retailers are also working more closely with law enforcement and devoting more internal resources to fighting and investigating theft.

Companies have looked for less intrusive measures to prevent small, more expensive items from being stolen like razors and mascara. But nothing has been as effective at stopping theft as much as the drastic step of locking products up, companies and analysts say.

A handful of retailers tested a security tool that lets customers use their cell phone to unlock products on the shelf. It’s essentially self-service for unlocking display cases — in exchange for a customer’s phone number. But the option has not spread widely.

“Nothing overly groundbreaking has been introduced,” said Phillip Blee, a retail analyst at William Blair.

Locking up merchandise

Locking up products is a last resort for chains, but they have never done it more. Customers now frequently encounter entire aisles locked behind display cabinets.

Retailers lock up the products that are at greatest risk of theft and most profitable for them to sell, experts say. Stores with more foot traffic and in areas with higher levels of shoplifting may have more products locked up than other locations.

Cigarettes, health and beauty products, over-the-counter medications, contraceptives, liquor, teeth-whitening strips and other small, expensive products are the most commonly stolen items at stores, according to surveys of retailers.

Shoplifters often swipe smaller items with higher price tags. Criminologists created an apt acronym, “CRAVED,” to predict merchandise at highest risk of theft: “concealable, removable, available, valuable, enjoyable, and disposable.”

Drug stores, grocery stores and big box chains lock up the most merchandise because they sell higher proportions of these items.

“To be clear, we do not like locking up product, but we like running stores, and we want to keep our stores open,” Target CEO Brian Cornell said last year. “We want to make sure if you come in and you need certain items we’ve got a team member there with a key — they can unlock it and make sure you can get what you need.” Target declined to comment to CNN.

“Different products experience different theft rates, depending on store location and other factors, and our product protection decisions are data driven,” a CVS spokesperson told CNN.

“We utilize a variety of different measures to deter or prevent theft and locking a product is a measure of last resort.”