Inventory shrink driven by organized retail crime is expected to reduce Target's profitability by an additional $500 million this year, Target CEO Brian Cornell said during a quarterly earnings call with investors Wednesday.

Cornell said the company is investing in strategies to prevent it and manage the financial impact so stores can remain open. Though the company's first quarter gross margin rate was slightly higher than last year's due to factors like lower freight costs and higher retail prices, the gains were partially offset by the increase in shrink – which can also include product damage and employee theft.

According to the National Retail Federation's 2022 National Retail Security Survey, retailers on average saw a 26.5% increase in organized retail crime incidents in 2021.

Unlike individuals shoplifting for personal use, organized retail crime is usually committed by groups connected to a larger crime rings that resell the goods, often online.... Read More: FOX45