San Jose Target is 'thriving' in stark contrast to nearby San Francisco where the retailer closed three stores

San Francisco and nearby San Jose seem worlds apart when it comes to the challenges facing retailers. 

On Tuesday, Target announced it would close nine stores across the country, including three in San Francisco, saying theft and organized retail crime were threatening the security of the retailer's employees and customers.

In a post on X, Marina Times journalist Susan Reynolds said that she had been interviewing retail employees around the Bay Area, and posted a clip from a San Jose Target that she called 'thriving and orderly' with 'no police or armed guards.'

'Here's the deal: it doesn't happen in cities just 20-30-60 minutes away. They're not closing,' she wrote.

San Jose is about an hour's drive south from San Francisco, and has a higher median income, and lower rates of crime and homelessness, than the Golden Gate City.

This San Jose Target was described as 'thriving and orderly' by a visiting journalist, after the retailer said it would close three stores in nearby San Francisco due to high crime rates

In April, San Jose Mayor Matt Mahan had harsh words for the city's northern neighbor as he discussed combatting crime in the city.

'I will say emphatically that San Jose will not become San Francisco. I think everyone deserves to live in a safe and clean environment,' he told the Mercury News. 

Mahan is a Democrat, as are nine of San Jose's 11 city council members. 

Target said on Tuesday it would close nine stores across four US states, including California, citing that theft and organized retail crime was threatening the security of the retailer's employees and customers.

The move, effective October 21, will see the closing of one store in New York City, two in Seattle, three locations across the San Francisco and Oakland markets and three in Portland.

Despite heavy investments in security, the company continued to face 'fundamental challenges' to running the stores safely, the retailer said. 

It operates nearly 2,000 stores across the United States.

'We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,' Target said in a statement.

Minneapolis, Minnesota-based Target said it would work with all eligible employees at the affected locations to offer opportunities for transfer to other Target locations. 

Theft and retail crime has become an increasingly pressing issue for US retailers, with organized crime rings targeting retail inventories and causing more financial loss to companies.

A report by the National Retail Federation (NRF), a trade association, earlier on Tuesday showed inventory 'shrink' as a percentage of total retail sales accounted for $112.1 billion in losses in 2022, up from $93.9 billion in 2021.

'Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,' said NRF Vice President for Asset Protection and Retail Operations David Johnston.

Retailers are either being forced to close a specific store location, reduce operating hours or alter in-store product selection to deal with the spike in retail crime, the report added.

A Target store in San Francisco locked its health and beauty products behind security glass. A video posted on TikTok on April 20 shows the items locked away from customers 

Dollar Tree has said it plans to remove goods like men's underwear, an item most prone to retail theft, from its stores.

Retailers are ramping up prevention methods with 34% of respondents increasing internal payroll to support risks related to retail crime and 46% increasing the use of third-party security personnel among other methods, according to NRF.

Even Britain is seeing more instances of shoplifting with the fashion chain Primark stepping up spending on security guards, CCTV and equipping staff with body cameras to try and combat in-store theft.

Walmart CFO John Rainey on a post-earnings call with Telsey Advisory Group said the retailer was 'putting armed guards in certain cases' in some stores located in cities.

The NRF survey was conducted online among senior loss prevention and security executives in the retail industry with insights from 177 retail brands.

San Francisco has been an epicenter for retail store closures in recent months, though not all companies have specifically cited theft.

Others have noted the declining foot traffic downtown, which could be partially due to concerns about crime, as well as a shift to remote working following the COVID-19 pandemic.