Walgreens cited shoplifting as rationale for closing 5 stores in San Francisco, but local officials, data, and experts cast doubt on that explanation

Customers walk by products locked in security cabinets at a Walgreens store that is set to be closed in the coming weeks on October 13, 2021 in San Francisco, California.
Photo by Justin Sullivan/Getty Images

Walgreens said it's closing some San Francisco stores because of an increase in retail theft.
Police data obtained by the Chronicle did not show high rates of shoplifting reports at the closing stores.
One expert said people moving out of the city during the pandemic could've hurt Walgreens' business.

Walgreens announced Tuesday it would be closing five of its San Francisco locations due to "organized retail crime," but police department data, local officials, and policy experts are casting doubt on that reasoning, according to a report published by the San Francisco Chronicle on Saturday.

While the report said the chain has experienced retail theft, other factors like the COVID-19 pandemic and oversaturation of stores were cited as potential factors behind the decision to close the stores.

Walgreens spokesperson Phil Caruso said retail theft across its San Francisco locations has increased in the past few months to five times the chain's average, SFGate reported.

However, San Francisco Police Department data obtained by the Chronicle contradicts Walgreens' claims, with one of the stores slated to close reporting only 23 shoplifting incidents since 2018. Some incidents of shoplifting likely go unreported, but the closing stores had on average less than two shoplifting reports per month since 2018.

"Organized retail crime continues to be a challenge facing retailers across San Francisco, and we are not immune to that," Caruso told SFGate. "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."

San Francisco Mayor London Breed pushed back against Walgreens' stated reasoning for closing the stores.

"They are saying (shoplifting is) the primary reason, but I also think when a place is not generating revenue, and when they're saturated - SF has a lot of Walgreens locations all over the city - so I do think that there are other factors that come into play," she told reporters last week.

Dean Preston, supervisor of San Francisco's 5th district, which will be impacted by a store closure, said the pharmacy chain is "abandoning the community" and has "long planned to close stores," the San Francisco Chronicle reported.

"Odd that some are so offended that I would suggest that a massive corporate chain might be closing retail locations for the exact reason they told investors they would close locations, rather than the reasons stated in their external PR," Preston said in a tweet on Friday.

-Dean Preston (@DeanPreston) October 13, 2021

In a 2019 Security and Exchange Commission filing, Walgreens announced it would launch a "Transformational Cost Management Program" that would shutter 200 stores in the US in order to save $1.5 billion in annual expenses by 2022.

A May study published by Stanford economist Nicholas Bloom found 15% of residents left San Francisco during the pandemic and have not returned, which he told the Chronicle could explain Walgreens' waning customer base in the city.

San Francisco does have relatively high rates of property crime, which criminal justice researcher Magnus Lofstrom told the Chronicle could be due in part to the Bay Area's vast income equality.

Walgreens did not immediately respond to Insider's request for comment.

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