Even dollar stores are getting slammed by the retail theft crisis.
Dollar Generals shares tanked Thursday after the discounter provided a bleak outlook for the rest of the year because of rising thefts and weak consumer demand at its 19,000 stores nationwide.
The Tennessee-based company warned Wall Street that profits may plunge by as much as 34% compared to its previous forecast for an 8% decline to flat growth as cut its full-year profit and sales targets for the second time this year.
“Our revised guide is really a function of the slower transactions that we’re seeing, and higher expected shrink,” Dollar General CFO Kelly Dilts said on a call with analysts after the company reported quarterly earnings that fell short of Wall Street estimates.
The reference to “shrink” — an industry term for stolen or damaged goods — follows a troubling trend cited by other major retailers who have blamed the scourge of organized retail theft for impacting their bottom line.
Target has said it expects to lose $500 million because of theft at its stores.
Dollar Tree said in May that it would need to raise prices in some regions because of persistent shoplifting.
Dollar General’s gross profit as a percentage of net sales fell 126 basis points in the quarter as retail shrink worsened. It flagged $100 million in additional shrink headwinds since its last earnings call in June.
CEO Jeff Owen did not elaborate on the extent of the theft, instead pointing to still-stubborn inflation for shoppers feeling “financially constrained.
Dollar Generals core customers are feeling the acute pressure of the cost-of-living-crisis, echoed Neil Saunders, retail analyst and managing director at GlobalData, in a report Thursday.
Dollar General lowered its same store sales guidance to a decline of about 1% and 1% increase compared to its previous forecast of a 1% to 2% increase.
The companys comparable sales dropped by 1% in the second quarter ended Aug. 4 and the company expects a pileup of inventory to be a drag on its earnings for the rest of the year as it slashes prices on items that havent been selling.
The quarter “marks the fourth consecutive guide down for Dollar General, which admittedly creates further uncertainty if we are hitting the bottom yet,” said Raymond James analyst Bobby Griffin.
The stock nosedived down more than 12% Thursday to close at $138.59.
It has tracked a nearly three-and-a-half-year low, slumping as much as 18.2% to hit $128.96 — making it one of the worst performers on the S&P 500 index this year.
As inflation continued to batter shoppers this year, more customers flocked to Dollar General and its rival Dollar Tree among other big discounters.
But food and other essential items are less profitable for those stores as profit margins on food are anemic.
While we are not satisfied with our overall financial results, we made significant progress in the second quarter improving execution in our supply chain and our stores, as well as reducing our inventory growth rate and further strengthening our price position, Owen said in a statement.
The Metropolitan Police have arrested 46 people after disrupting a criminal network suspected of smuggling up to 40,000 stolen phones from the UK to China.
A months-long investigation began last December when a box on its way to Hong Kong was found at a warehouse near Heathrow Airport containing around 1,000 iPhones.
Officers discovered almost all of the phones had been stolen, the force said. It then launched Operation Echosteep, bringing in specialist detectives to track down the suspects.
They intercepted further shipments and used forensics to identify two men in their 30s, who were arrested on suspicion of handling stolen goods on 23 September. They have since been charged and remanded in custody.
Image: The discovery of the phones at a warehouse near Heathrow Airport. Pic: Metropolitan Police
A number of phones were found in the men’s car and around 2,000 more devices were found at properties linked to them, the Met Police said.
Detective Inspector Mark Gavin, the senior investigating officer for Operation Echosteep, said: “This group specifically targeted Apple products because of their profitability overseas.
“We discovered street thieves were being paid up to £300 per handset and uncovered evidence of devices being sold for up to $5,000 (£3,700) in China.”
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Image: Phones piled on the backseat of the suspects’ car. Pic: Metropolitan Police
Police call on phone manufacturers to do more
Commander Andrew Featherstone, the Met’s lead for tackling phone theft, has described the operation as “the largest crackdown on mobile phone theft and robbery in the UK”.
He continued: “We’ve shown how serious we are about tackling this issue, but we need more help from the industry.
“We’re calling on phone manufacturers such as Apple and Samsung to do more to support us and protect their customers – especially around phone security and re-use.”
A total of 46 people have been arrested during two weeks of what the force has described as “targeted and precise activity”.
These include the arrests of 11 people during an operation targeting gangs robbing courier vans delivering the new iPhone 17 and the arrest of two men in their 30s – on suspicion of money laundering and handling stolen goods – after officers recovered almost £40,000 in cash at a phone shop in north London.
Another man was charged with handling stolen goods after being stopped with 10 suspected stolen phones at Heathrow Airport on 20 September.
Further enquiries revealed the man – who also had two iPads, two laptops and two Rolex watches – had travelled between London and Algeria more than 200 times in two years, the force said.
London mayor Sadiq Khan said it is “simply too easy and profitable” for criminals “making millions by repurposing stolen phones and selling them abroad”.
“I will continue to call on the mobile phone industry to go harder and faster in designing out this crime by making stolen devices unusable,” he said. “We need coordinated global action to shut down this trade and build a safer London for everyone.”
Sir Keir Starmer has condemned plans for pro-Palestine protests two years to the day since the October 7 attacks on Israel, labelling them “un-British”.
Writing in The Times, the prime minister said demonstrations set to take place at several universities today showed a lack of respect for others, claiming previous rallies had been used by some as a “despicable excuse to attack British Jews”.
Adrian Daulby, 53, and Melvin Cravitz, 66, died in the attack at Heaton Park synagogue in Crumpsall on Thursday.
Image: Adrian Daulby (left) and Melvin Cravitz. Pics: Family handout/Facebook
‘A stain on who we are’
Mr Daulby, a member of the congregation, was shot accidentally when police fired on attacker Jihad al Shamie.
The synagogue’s rabbi told Sky News it happened as Mr Daulby “was holding the doors to make sure everyone inside stayed safe”.
The family of Mr Cravitz – a worshipper at the synagogue who police originally stated was a security guard – said he would “do anything to help anyone”.
Sir Keir described the attack as “horrifying”, adding: “This is a stain on who we are, and this country will always stand tall and united against those who wish harm and hatred upon Jewish communities.”
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Synagogue security guard describes moment attack unfolded
Ministers had urged protesters to rethink attending a rally in support of the banned group Palestine Action over the weekend, given its proximity to the synagogue attack.
Image: Pro-Palestine demonstrations in central London have attracted thousands of people. Pic: PA
‘A living nightmare’
Of October 7, the prime minister said it was “the worst attack on the Jewish people since the Holocaust”.
“The brutal, cold-blooded torture and murder of Jews in their own homes.
“And the taking of hostages, including British citizens, some of whom remain in Gaza today.
“Since that awful day, so many have endured a living nightmare. When I spoke with some of the families of the British hostages, I promised them in person that we will not cease in our efforts to bring their loved ones home.”
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PM: ‘We must defeat antisemitism’
PM welcomes Trump’s peace efforts
In his statement, Sir Keir also spoke about the government’s priorities in the Middle East, which he said included releasing the hostages, getting more aid into Gaza, and a ceasefire “that can lead to a lasting and just peace as a step towards a two-state solution”.
Mr Trump’s 20-point peace plan includes the disarmament of Hamas, which would have no role in Gaza’s future governance. The US president would lead an interim administration with the help of Sir Tony Blair, among others.
He has demanded Israel stop bombing Gaza, though airstrikes have continued.
Israel’s war on Hamas has now killed more than 67,000 people in Gaza, most of them civilians, according to the Hamas-run health ministry, which does not differentiate between civilians or combatants.
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‘We’re going to have a Gaza deal’
Antisemitism ‘a terrible scourge’
Conservative leader Kemi Badenoch also criticised pro-Palestine protests in a statement marking the October 7 anniversary, claiming some “turn into hate marches on our streets”.
She said the government’s decision to recognise a Palestinian state “has rewarded the terrorists that perpetrated the October 7 atrocities”.
“Appeasement does not work,” she said, adding: “There are still 48 hostages held captive in Gaza. They must come home now.”
Liberal Democrat leader Sir Ed Davey described antisemitism as a “terrible scourge” and said: “We stand in solidarity with British Jews, the people of Israel and Jewish communities around the world against terrorism, and against antisemitism in all its forms.”
Of the peace talks, he added: “We desperately hope that they will finally see the hostages returned home to their families, a lasting bilateral ceasefire, Hamas out of power in Gaza for good – and set us on the path to a two-state solution that offers both Israelis and Palestinians the peace and security they deserve.”