Locking Up Items To Deter Shoplifting Is Pushing Shoppers Online

Longtime Slashdot reader schwit1 shares a report from Axios: Locking up merchandise at drugstores and discount retailers hasn’t curbed retail theft but is driving frustrated consumers to shop online more, retail experts tell Axios. Retail crime is eating into retailers’ profits and high theft rates are also leading to a rise in store closures. Secured cases can cause sales to drop 15% to 25%, Joe Budano, CEO of anti-theft technology company Indyme, previously told Axios. Barricading everything from razors to laundry detergent has largely backfired and broken shopping in America, Bloomberg reports.

Aisles full of locked plexiglass cases are common at many CVS and Walgreens stores where consumers have to wait for an employee to unlock them. Target, Walmart, Dollar General and other retailers have also pulled back on self-checkout to deter shoplifting. “Locking up products worsens the shopping experience, and it makes things inconvenient and difficult,” GlobalData retail analyst Neil Saunders said, adding it pushes shoppers to other retailers or to move purchases online.

Driving the news: Manmohan Mahajan, Walgreens global chief financial officer, said in a June earnings call that the retailer was experiencing “higher levels of shrink.” Amazon CEO Andy Jassy spoke of the “speed and ease” of ordering online versus walking into pharmacies on a call with investors last week. “It’s a pretty tough experience with how much is locked behind cabinets, where you have to press a button to get somebody to come out and open the cabinets for you,” Jassy said. schwit1 adds: “The American-style retail shopping experience was invented in a high-trust environment. As trust erodes, so does the experience.”

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Can a Free Business Rent Program Revive San Francisco’s Downtown?

The New York Times visits the downtown of one of America’s biggest tech cities to explore San Francisco’s “Vacant to Vibrant” initiative, where “city and business leaders provide free rent for up to six months” to “entrepreneurs who want to set up shop in empty spaces, many of which are on the ground floor of office buildings.”

The program also offers funding for business expenses (plus technical and business permit assistance) — and it seems to be working. One cafe went on to sign a five-year lease for a space in the financial district’s iconic One Embarcadero Center building — and the building’s landlord says the program also resulted in another three long leases. Can the progress continue?

The hope is that these pop-up operations will pay rent and sign longer leases after the free-rent period is over, and that their presence will regenerate foot traffic in the area. Some 850 entrepreneurs initially applied for a slot, and 17 businesses were chosen to occupy nine storefront spaces in the fall. Out of those businesses, seven extended their leases and now pay rent. Eleven businesses were selected in May for the program’s second cohort, which started operating their storefronts this summer…

The city’s office vacancy rate hit 33.7%, a record high, in the second quarter this year, according to JLL, a commercial real estate brokerage. That’s one of the bleakest office markets in the nation, which has an average vacancy rate of about 22%. For the moment, however, San Francisco has a silver lining in Vacant to Vibrant. Rod Diehl, the BXP executive vice president who oversees its West Coast properties, said the pop-up strategy was good not just for local business owners to test their concepts and explore growth opportunities, but also for office leasing efforts… Beyond free rent, which is typically given for three months with a possibility for another three months, Vacant to Vibrant provides up to $12,000 to the businesses to help cover insurance and other expenses. The program also offers grants up to $5,000 for building owners to cover costs for tenant improvements in the spaces as well as for other expenses like utilities…

In addition to the Vacant to Vibrant program — which received $1 million from the city initially and is set to receive another $1 million for the current fiscal year, which began July 1 — the city is directing nearly $2 million toward a similar pop-up program. This new program would help businesses occupy larger empty spaces along Powell Street, as crime and other retail pressures have driven out several retailers, including Anthropologie, Banana Republic and Crate & Barrel, in the Union Square area.
One business owner who joined “Vacant to Vibrant” in May says they haven’t decided yet whether to sign a lease. “It’s not as crowded as before the pandemic.” But according to the article, “she was hopeful that more businesses opening nearby would attract more people.”

“In addition to filling empty storefronts, the program has the opportunity to bring in a fresher and more localized downtown shopping vibe, said Laurel Arvanitidis, director for business development at San Francisco’s Office of Economic and Workplace Development.”

Victor Gonzalez, an entrepreneur who founded GCS Agency to stage showings for artists, is embracing the opportunity to get a foothold downtown despite the city’s challenges. When he opened a storefront as part of the first Vacant to Vibrant cohort in the Financial District last year, he immediately knew that he wanted to stay there as long as possible. He has since signed a three-year lease. “San Francisco is no stranger to big booms and busts,” he said. “So if we’re in the midst of a bust, what’s next? It’s a boom. And I want to be positioned to be part of it.”

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