Posted on October 19, 2021

San Francisco Mayor London Breed Claims Walgreens Is Only Shutting Five Stores to Cut Costs

Brian Stieglitz, Daily Mail, October 18, 2021

San Francisco mayor London Breed has disputed Walgreen’s claims it needs to shutter five stores in the city because its soft laws on shoplifting have led to rampant theft, claiming that the big chain was simply trying to slash costs and increase profits – and that retail theft was an easy scapegoat.

Mayor London Breed told reporters last week that she thinks ‘there are other factors that come into play’ and San Francisco District 5 Supervisor Dean Preston tweeted that the pharmacy chain has ‘long-planned to close hundreds of locations.’

The national chain has closed 17 of its 70 San Francisco locations in the past two years and cited the shelf raiders, who have swiped every kind of product not behind lock and key.

But the pharmacy chain insists that San Francisco’s rampant crime is to blame, revealing it spends 46 times as much on security at its city stores, which face five times as many shoplifting incidents compared with those elsewhere in the country.

Walgreens officials have cited ‘organized retail crime’ – in which the thieves sell the swiped merchandise outside the stores – as a main reason for the most recent closures.

Asked to provide the Daily Mail with an explanation for the closings, a Walgreens spokesperson referred back to a statement sent to media outlets Friday, which read, ‘Due to ongoing organized retail crime, we have made the difficult decision to close five stores across San Francisco. 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.’

The statement continues, ‘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. 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.’

Shoplifting incidents occurred at irregular levels across the five locations that are closing, according to data compiled by the San Francisco Chronicle and obtained from the San Francisco Police Department.

One closing store, on Ocean Avenue, only reported seven shoplifting incidents this year and a total of 23 since 2018. Another closing store, on Gough Street, was hit by shoplifters 45 times so far this year alone and 85 times since 2018. The same store went a full year in 2019 without any incidents, the data shows. However, not all shoplifting incidents are reported to police.

Walgreens has 53 stores across San Francisco as of now, compared to only 22 CVS stores. Mayor London Breed noted that the chain could be moving to consolidate space, but it using the shoplifting narrative to avoid pushback for closing certain stores that some say are a staple of their community.

‘They are saying (shoplifting is) the primary reason, but I also think when a place is not generating revenue, and when they’re saturated — S.F. 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 last week.

Walgreens told shareholders four years ago that it planned to close 600 stores nationwide and ended up closing 769, according to the San Francisco Chronicle. The Illinois-based company said in a 2019 U.S. Security and Exchange Commission filing that it would shutter 200 stores, or fewer than 3 percent of its 10,000 U.S. locations in a cost-saving measures projected to save $1.5 billion in annual expenses by 2022.

Supervisor Dean Preston posted a series of tweets Friday, following national media coverage about the closure of the five San Francisco stores, in which he wrote, ‘Walgreens has announced it will be closing its 300 Gough store in my district, citing organized retail theft. This store serves important needs of neighborhood residents. Media reports have accepted without analysis Walgreens’ assertion that it’s closing due to retail theft.’

He referenced the 2019 SEC filing from the company and asked, ‘So is Walgreens closing stores because of theft or because of a pre-existing business plan to cut costs and increase profits by consolidating stores and shifting customers to online purchases?’

Preston added that his office is ‘seeking further clarity on the reasons for the announced closures and whether there is a path to keeping the 300 Gough store open. We thank community members for reaching out and emphasizing their desire for a pharmacy in the neighborhood.’

Preston said to the San Francisco Chronicle, ‘Two things are true: Walgreens has experienced retail theft, and Walgreens has long planned to close stores. We do not know which factor or factors led to the decision to close 300 Gough and other San Francisco stores.’

The Walgreens locations that will be closing include: 2550 Ocean Avenue, on November 8, 4645 Mission Street, on November 11, 745 Clement Street, on November 15, 300 Gough Street on November 15, and 3400 Cesar Chavez Street on November 17.

Viral videos taken throughout the summer have shown shoplifters brazenly sauntering out of stores with armfuls of stolen goods as witnesses watch in shock.

Shoplifting has been a problem in the Democrat-run state since 2014 – following the passage of Proposition 47, a ballot referendum known as the Safe Neighborhoods and Schools Act – that downgraded the theft of property worth less than $950 in value from a felony to a misdemeanor.

Cases have jumped during the pandemic as store staff and security guards choose not to pursue the thieves. Larceny and theft remain the most common crimes committed in San Francisco, increasing by about 8 percent from last year. There were 21,842 cases reported through October 10 of this year, compared with 20,254 cases during the same time through 2020.

Each of the five stores that are closing will transfer prescription information to another store in close proximity and the chain intends to relocate employees from closing stores to other nearby ones.

Ahsha Safai, a member of the San Francisco Board of Supervisors, posted a series of tweets following news of the upcoming closures, writing, ‘@Walgreens will be closing 5 additional stores in San Francisco – including the one located at 4645 Mission St in the Excelsior.’

‘I am completely devastated by this news – this Walgreens is less than a mile from seven schools and has been a staple for seniors, families and children for decades. This closure will significantly impact this community.’

Safai told the SFGate that the Mission Street store recently added an off-duty police officer as a store security guard, but it was ‘too little, too late.’

‘This is a sad day for San Francisco,’ Safai said. ‘We can’t continue to let these anchor institutions close that so many people rely on.’

Another closing location – at 300 Gough Street – was the subject of a viral video in June that showed a thief heaping armfuls of Walgreens products into a trash bag, then riding his bike through the store with the stolen goods while the security guard and bystanders looked on.

The suspect, Jean Lugo-Romero, 40, was arrested shortly after and remains in jail. He had previously robbed the same store on May 29, 30, 31 and June 1 – in addition to CVS stores throughout the city – but the chains declined to prosecute.

About two weeks ago, Safai introduced legislation allowing deputies to provide security services at retail stores and commercial districts. They would be off-duty and paid overtime by the retailers or business districts, without support from the city.

San Francisco police officers already have the opportunity to earn additional income as private security guards while off duty, under what’s called the 10B program in the city’s code. Safai’s legislation would extend this to include sheriff’s deputies, through a 10A administrative amendment to the city’s code.

Following news of the closures, Safai tweeted, ‘This is exactly why we need more presence on our commercial corridors and an expansion of the ’10A’ program to reduce and deter commercial retail theft.’

He added, ‘The City needs to act with a sense of urgency to reduce and deter the number of incidents of commercial retail theft. That is exactly what the ’10A’ legislation aims achieve as we approach the holiday season.’

There are already 2,000 police officers eligible to pick up the overtime and another 800 deputies would be added under Safai’s legislation. Deputies will be able to leave their posts to apprehend thieves and follow them out of the store.

Walgreens closed a location at 790 Van Ness Avenue in October 2020 after losing up to $1,000 in stolen merchandise numerous days in a row, according to the San Francisco Chronicle. That same month, Inside Edition was reporting from the store on the increase in crime when camera crews caught a shoplifter in the act.

A man in a balaclava was seen jumping over the seemingly unmanned cash register counter and stealing an inflatable airbed, Inside Edition said. A woman is then seen holding the store door open for the man who makes a leisurely getaway on an electric scooter.

Walgreens also spends 46 times more on security guards in the city than elsewhere, Jason Cunningham, regional vice president for pharmacy and retail operations in California and Hawaii, said at a hearing on retail crimes held in May by District Attorney Chesa Boudin and Safai.

Many have blamed the surge in crime on progressive criminal reform and what they call Boudin’s ‘soft-on-crime’ approach.

In July, Boudin defended the shoplifter from the viral video at the closing Walgreens on Gough Street and told the New Yorker, ‘When I watch that video, I think about five questions that people are not asking that I think they should. Is he drug addicted, mentally ill, desperate? Is he part of a major retail fencing operation? What’s driving this behavior and is it in any way representative, because it was presented as something symptomatic?’

Boudin was slammed by an Instagram user who posted another viral video of an incident in July when at least ten people stole armfuls of designer goods from luxury department store Neiman Marcus before fleeing without anyone trying to stop them.

‘Everyone in the city is tired of this so please sign the recall petition to oust Chesa Boudin now! Crime is legal basically and allowed and tolerated due to policies put in place and supported by all our supervisors and mayor and DA,’ Instagram user sfstreets415, whose bio reads, ‘Asian photographer and crime reporter,’ wrote.

The petition was first launched in March to recall Boudin, who has come under fire in recent years, along with the city’s leadership, for allegedly not doing enough to combat San Francisco’s shoplifting problem.

In addition to Safai’s legislation, San Francisco Mayor London Breed announced last month that the city would be bolstering its organized retail crime unit and making it easier to report shoplifters.

She said at a news conference, ‘We care about criminal justice reform. We care about second chances. We care about making sure that people are not wrongly accused. But don’t take our kindness for weakness, our compassion for weakness.’

The San Francisco Police Department’s organized retail crime unit will increase from two to six investigators and an ambassador program of retired officers will increase from eight to 25 cops assigned to high-profile commercial areas.

The department is also established a position for a dedicated retail theft coordinator to work on making it easier for witnesses to report shoplifting.

‘We’re not going to arrest everybody, although we’d like to,’ said San Francisco Police Chief Bill Scott at the news conference last month. ‘But just know that you don’t get a free pass when you come to this city and commit those types of crimes.’

San Francisco’s public defender, Mano Raju, wrote in a statement to the Associated Press that bulking up on ‘failed approaches’ won’t bring about meaningful change.

He added, ‘It may shift the target, but it will not impact financially motivated crime generally. We need to focus our resources to treat the source of the problem.’

Critics also showed skepticism toward Safai’s plan to allow police to work as security guards for retailers.

John Crew, a retired police practices expert, told the San Francisco Chronicle that the jobs of police officer and sheriff’s deputy are not congruent and there are major training differences.

‘Deputy sheriffs in this town play an entirely different role than SFPD,’ he said. ‘It is not an apples-to-apples comparison. Generally speaking, the San Francisco Sheriff’s Department has no experience in street-level enforcement.’

Lt. Tracy McCray, vice president of the San Francisco Police Officers Association, said the union is also opposed to the legislation and told the news outlet, ‘Sheriff’s deputies are experts at working in a controlled environment. Those stores are not controlled environments. We go through a lot of training that they don’t go through and I don’t think their standards are as rigorous as they are in our department.’

In addition to Breed and Preston’s claims, another theory is that the San Francisco population has dwindled following the coronavirus pandemic and the pharmacy may have closed five stores due to a drop in demand.

‘Since working from home is here to stay, city center retail is going to see lower demand in the long run,’ Stanford University economics Professor Nicholas Bloom told the San Francisco Chronicle, citing a study he published in May that shows 15 percent of residents left the city center during the pandemic and have not returned.

He added, ‘So this is going to be one of many such store closures. While Walgreens may have publicly blamed this on higher thefts, another factor is there are simply less people in the city center, spending less money.’