By Thomas K. Pendergast
The Walgreens at 745 Clement St. will close on Nov. 15, joining four other stores that the company recently announced it was closing, and adding to the 17 stores the company has shuttered throughout the last five years.
“Due to ongoing organized retail crime, we have made the difficult decision to close five stores across San Francisco,” said Walgreens spokesperson Phil Caruso. “Each store will transfer prescriptions to a nearby Walgreens location within a mile radius and we expect to place the stores’ team members in other nearby locations.
“Organized retail crime continues to be a challenge facing retailers across San Francisco. Retail theft across our San Francisco stores has continued to increase in the past few months to five times our chain average,” Caruso said. “During this time, to help combat this issue, we increased our investments in security measures in stores across the City to 46 times our chain average in an effort to provide a safe environment.”
Although viral videos of organized theft rings clearing shelves of products – including one of a bicyclist cruising the aisles and riding out the front door with a trash bag full of loot – have grabbed global media attention and have added some negative images to the City, not everyone is buying into such a convenient excuse.
“They are saying that’s the primary reason, but I also think when a place is not generating revenue and they’re saturated – San Francisco has a lot of Walgreens locations all over the City – so I do think that there are other factors that come into play,” Mayor London Breed told reporters on Oct. 13, soon after the company announced the latest five-store closures. “So, unfortunately, I can’t control what they do or what they say.”
Including the five stores recently announced, San Francisco has 53 Walgreens locations. Its biggest local competitor, CVS Pharmacy, has 22. Five years ago, Walgreens had 70 stores throughout the City.
District 5 Supervisor Dean Preston is also skeptical that it is just about the thefts.
As reported in the San Francisco Chronicle, Preston noted that Walgreens had long planned to close stores, claiming the company was “abandoning the community.”
The other four stores marked for closure are at 2550 Ocean Ave.; 4645 Mission St.; 300 Gough St.; and 3400 Cesar Chavez St., all closing in November.
About a half-mile away from the Clement Street store, however, the Walgreens at 5280 Geary Boulevard is not marked for closure. That may change.
SEC filings show that in December of 2018, the company announced a “transformational cost management program” that would “deliver in excess of $1.5 billion of annual cost savings by fiscal 2022…. Following a review of the real estate footprint in the United States, which review was also announced on the company’s earnings call for the fiscal quarter ended May 31, 2019, the company also plans to close approximately 200 locations in the United States.”
But Caruso said that program was already finished when the decision was made to close the most recent five locations, thus implying that bringing the program mentioned in the SEC filings into the current debate is a red herring.
Yet, some parts of Walgreens’s explanation don’t quite add up either.
An Oct. 15 article in the San Francisco Chronicle using an SFPD data source shows that three of the five stores did have a sharp increase in thefts since 2018. For the other two, that was not the case.
According to the Chronicle’s analysis, the Clement Street store had five reported retail thefts in 2018; 11 in 2019; 26 in 2020; and 44 in 2021.
The Gough Street store had 16 reported retail thefts in 2018; zero in 2019; 24 in 2020; and 45 in 2021.
The Mission Street store had 10 reported retail thefts in 2018; 25 in 2019; 37 in 2020; but only three in 2021.
Meanwhile, the Cesar Chavez Street store had six reported retail thefts in 2018; eight in 2019, 19 in 2020; then another 17 in 2021.
The numbers for the Ocean Avenue store hardly changed in that time, with nine reported retail thefts in 2018; four in 2019; three in 2020; and seven in 2021, according to the Chronicle.
A Richmond Review analysis of SFPD crime data for Clement Street shows that along that commercial corridor, the crimes that affect merchants the most – like shoplifting/larceny, auto burglaries, and commercial burglaries – went up from 2018 through 2019 but then dropped severely after the pandemic hit. From March of 2018 through March of 2019, about 308 relevant incident reports were generated in the commercial corridor between Arguello Boulevard and 12th Avenue. That number went up to 369 for those same months from 2019 to 2020 but then dropped to 219 incidents in that same time frame during the pandemic.
When the pandemic shutdown happened in March of 2020, most retail businesses closed their doors, thus eliminating many shoplifting opportunities.
But essential businesses, like Walgreens and CVS Pharmacy, stayed open. A more focused analysis of the data tells a different story: The data set is not attached to specific street addresses, but instead to street intersections.
And consistently two street intersections generated relative incident reports far above the others between Arguello Boulevard and 12th Avenue: Eighth and Ninth avenues. Of the two, Ninth and Clement, where this Walgreens sits, contributed the most, with 73 incident reports generated between March of 2019 and March of 2020; 81 generated between March of 2020 and March of 2021, and then another 45 up to August of 2021.
Particularly revealing is a look at incident reports for crimes like shoplifting/larceny, commercial burglary, and robbery related to that same intersection.
From March of 2018 to March of 2019, 10 incidents were reported; from March of 2019 to March of 2020, 21 were reported; from March of 2020 to March of 2021, 50 were reported and from March of 2021 to August of 2021, 36 were reported.
Meanwhile, CVS Pharmacy closed down two stores in 2019 but has not announced any more stores closing since then.
But none of these statistics, either in the Chronicle or Richmond Review reports, included data provided by Walgreens themselves, a less-than-optimum situation for understanding the scope or reality of the problem.
Recently the editorial board of the San Francisco Examiner took the company to task over this same point.
“To be clear organized retail crime presents a serious threat to businesses in the City,” the Oct. 20 editorial stated, “… which is why Walgreens should embrace transparency and detail precisely what led to the closure of the five stores. A more transparent approach would help shed light on the extent of the organized retail crime problem and whether companies have given up on reporting crimes. It would also help pressure city leaders to increase their response to the problem, if necessary.
“Unfortunately, Walgreens’ opaque approach leaves it vulnerable to claims that factors other than shoplifting may be driving the company’s shrinkage,” The Examiner editorial concluded.
Categories: Richmond District