“Crime is up.” “How should I protect my employees and customers from increasing violence?” “More and more shoplifting incidents escalate into physical assaults.”
Comments or questions of this nature have certainly increased in frequency within the retail environment in the past two years or so. Is it just retail though? Certainly not. I have encountered similar statements in my work with the banking, restaurant, and other industries.
We may not get to the bottom of all of this until experts study the situation in retrospect. The one thing we can do now is better understand the nature of these new trends and how different areas of the country are affected. Most importantly, how are your stores affected?
Let’s start with a nationwide perspective.
The Federal Bureau of Investigations (FBI) reported upward trends in violent crimes in the United States in 2015 and 2016, following many years of declining patterns. Property crimes, on the other hand, continued to decline at the nationwide level. A closer look at some of the regional statistics shows that these trends vary fairly significantly across the country.
For instance, the District of Columbia was subject to an 8.6 percent increase in larceny-theft even though the FBI reported an overall decrease for the nation. While law enforcement trends began to emerge, media reports sounded the alarm about crime increases for many cities across the country. Some reports were supported by factual information, but many were somewhat sensationalized and often misleading.
What does all this mean? Well, the results are mixed. It is not clear that we have reached a floor and that crime rates are heading back up nationwide. It is important to examine local and regional trends to determine exactly what is going on.
It does seem clear, though, that the old, decades-long narrative of endlessly falling crime rates may need to be updated.
Fiction versus Fact: A Closer Look at Data
In addition to changing crime trends, new crime-reporting practices have emerged. Police departments began making more comprehensive crime statistics available to the public. Chicago, Baltimore, and Houston are just some examples of agencies that provide access to impressive data portals. They are shifting from displaying aggregate information for a city or a district to providing address-specific data. Incident date, time, precise crime designation, and even premises-type information are becoming increasingly available.
Some of it can be accessed through online portals, while one must submit an official data request in other jurisdictions. It is important for the retail industry to take advantage of this information and conduct address-specific and retail-specific assessments. Each issue within this series will examine a different city, and the individual analyses will be customized to data available for that location. The goal is to provide you with information that will allow for informed benchmarking of crime at your stores against what your peers may be experiencing.
Why Los Angeles?
Los Angeles, the second-most populous city in the United States, has been the subject of many conversations among retailers, with many concerned about recent upward crime trends. Proposition 47, an initiative that reduced certain felonies to misdemeanors, is often mentioned in the context of these debates. It was passed in California in November 2014 and, according to many, resulted in unintended, negative consequences.
This post looks at Los Angeles crime before and after the institution of Proposition 47, but there are a multitude of factors at play. We cannot make a definitive causal determination of Proposition 47’s impact.
The Los Angeles Police Department (LAPD) is one of the agencies that has made comprehensive, site-specific crime statistics available to the public, and that is another reason why that particular city in California was chosen to open this series of assessments. CAP Index’s analytics team obtained 2011–2017 LAPD crime data from an online portal.
Premises-type information allowed crimes reported at retail locations, including department stores, gas stations, and liquor stores, to be subsetted from all other offenses. We cannot take responsibility for the accuracy or completeness of this information, but we found it to be valuable in this high-level assessment of retail crime trends.
“The Unintended Consequences of California’s Proposition 47 on Retail Theft” Podcast
Before we get into the findings of the analysis, I would like to highlight an EyeOnLP podcast from the December 2017 edition of LPM Online, which provided some excellent observations regarding Proposition 47 and recent Los Angeles crime trends.
The podcast featured Aaron Moreno, senior director of government relations for the California Grocers Association, and Bill Williams, retired captain with LAPD and also a founding member of the Los Angeles Area Organized Retail Crimes Association (LAAORCA).
Also on the panel was Loren Naiman, who retired in January 2017 from his last assignment in the Post Conviction Litigation and Discovery Division of the Office of the Los Angeles County District Attorney.
Finally, Karl Langhorst, CPP, CFI, rounded out the panel of experts with his experience as a retail practitioner, former corporate director of loss prevention for the Kroger Co., and currently executive vice president of ALTO US.
The panel started by describing the background of Proposition 47, which was intended to reduce crowding in California’s overwhelmed prisons and provide treatment rather than jail time to qualifying drug offenders. However, the experts quickly moved on to highlight some of the unintended consequences of the new measure that, according to them, contributed to concerning changes in criminal behavior. One of the initiative’s main effects is conversion of many nonviolent offenses, including shoplifting, from felonies to misdemeanors.
“Since the passage of Proposition 47 in California, many retailers have experienced a steady increase of both shoplifting and organized retail crime in their stores. This increase of incidents not only has impacted retailers’ profitability but also, more importantly, has created an influx of recidivist offenders that are more brazen and, in many cases, more hostile to store employees who are trying to deter their criminal activity,” said Langhorst.
“Since 2014, we have seen a significant increase in both incidents and in the value of cases as it became known that no matter how many times you’re caught-so long as you stay under $950—you’ll get a citation to show up in court,” added Moreno.
The experts talked about the phenomenon of decriminalizing shoplifting with more and more offenders seeing this crime as low risk and high reward. Moreno compared the punishment for these newly established misdemeanor offenses to “a slap on the wrist.” Williams highlighted the fact that there’s even been a shift in shoplifting offender types, with gangs getting more and more engaged in retail theft because they realize that the penalty is now significantly lower.
Finally, Naiman provided his prosecutor’s perspective and stated, “Since Prop 47 was voted into law in 2014, more than 13,500 prisoners were released to the streets, and another 200,000 felony convictions were retroactively made misdemeanors. The real question is whether or not this is a net positive or an extreme negative for the community. And the bottom line is that there are clearly people who should be in jail and are now out.”
A lot of strong and concerning statements are made throughout the podcast, and they echo comments of many retailers with stores in the area. It is evident that all panelists share serious concerns about the potential negative effects of Proposition 47, including upward crime trends and changes in criminal behavior, as well as criminals’ perceptions of the penal system.
Let’s shift to results of the LAPD crime analysis to see what is in the data.
Los Angeles Crime: Shoplifting Trends
The shoplifting category provided by LAPD is divided into two groups: shoplifting-grand theft ($950.01 and over) and shoplifting-petty theft ($950.00 and under). This breakdown corresponds to the misdemeanor dividing line adopted by Proposition 47 and should be helpful for putting the trends into the perspective of this controversial measure.
As is clearly evident in the graphs, both grand theft and petty theft shoplifting have gone up at Los Angeles retail locations in the past few years. Both are relatively flat from 2011 to 2013, followed by large increases through 2016 when the numbers either leveled off or decreased. While both types of shoplifting have increased over the last few years, the magnitude of these changes differs for the two.
Grand theft shoplifting went up by 64.3 percent in 2014 versus 2013 and then by another 54.5 percent in 2015 versus 2014. Petty theft, on the other hand, increased by 25.3 percent in 2014 and by 26.4 percent in 2015 when compared to the previous years. Clearly, grand theft increases were more substantial than those for petty theft.
A similar assessment was conducted for individual retail segments included within the aggregate retail category. The vast majority of them show upward trends in both grand theft and petty theft shoplifting that follow patterns similar to those reported above. However, there are several categories that differ. For instance, while petty theft shows a drop in 2017 for the aggregate retail group, several retail segments, including cell phone stores, gas stations, liquor stores, and mini-mart locations, continue to show an increase in 2017.
Gas stations, for example, reported 71.6 percent more petty thefts in 2017 when compared to 2016, and mini-mart stores show a 64.3 percent increase. Drug stores show a distinctive trend as well. Petty theft shoplifting for drug stores went up by 73.4 percent in 2012 and by 17.0 percent in 2014 but began a consistent downward trend over the course of the next three years.
Clearly, there are different patterns for various retail subgroups. However, in aggregate, a marked upward trend in both petty theft and grand theft began in 2014. Did Proposition 47 have an impact? Is increased reporting involved? Did data collection and recording practices change over time? Did organized retail crime skyrocket in Los Angeles?
Our study does not allow us to disentangle the causal relationships underlying these upward trends. However, the bottom line is that shoplifting is up for most retail segments. What about other retail crimes in Los Angeles?
For more on Los Angeles crime trends beyond shoplifting, check out the full article, “Retail Crime in Los Angeles,” which was originally published in 2018. This excerpt was updated March 12, 2019.Â