4 Major Plot Holes in the “Organized Crime Rings Are Closing Walgreens!” Narrative

There are key questions mainstream journalists have yet to ask. They probably should before Prop 47 is repealed and more faceless Black and Brown kids are thrown in prison.

Based on the torrent of outrage the last time I wrote about The Walgreens Shoplifting Story—in the San Francisco Chronicle, no less—I can honestly say that the story has morphed from trope, a narrative, a viral ideological thingamajig into a full-blown religious conviction. No other subject I’ve written about solicits as much personal offense, vitriol, or clouded thinking. That Walgreens stores are closing only, or at least largely, due to “organized shoplifting” rings isn’t just a conventional wisdom, its dogma.

As such, I write this knowing full well the response it will invariably unleash. And if you don’t think someone from Chicago can comment on San Francisco (an inscrutable and exotic land I cannot possibly understand, many commenters have told me) by all means click the exit button on your browser. But if you’re someone with an open mind who is willing to consider that the whole narrative seems a little pat and overblown, please read on. 

First, it’s important to establish the stakes because these have been entirely omitted from all the reporting on the topic. 

Regardless of what one thinks Walgreens’ business logic is for the closings, one cannot deny the story—either by design or incident—has become a full blown reactionary meme with a specific political context. As Steven Keehner documented at FAIR in July, a single viral video of shoplifting at Walgreens solicited over 300 articles nationwide, not including write-ups in South Africa, Mexico, UK, and South Korea. If you’re wondering this is, dollar for dollar, 474,183% more coverage than the one (1) mainstream media article about Walgreens admitting it stole $4.5 million from its employees over several years. The five Walgreens closings announced last week garnered coverage in The New York Times, The Washington Post, ABC News, CBS News, Yahoo News (which ran three stories), USA Today, and Bloomberg. There were reports about the closings on Local TV news stations in Rockford, Ill., Miami, Albany, Chicago, Dayton, Ohio and Jacksonville, Fla. Sinclair Broadcast Group, a right-wing media conglomerate that owns TV networks, ran an article about it that was put on the front page of hundreds of “local” new sites. Walgreens closings have been heavily featured on Tucker Carlson, Sean Hannity and Fox and Friends.   

No reasonable person can view this coverage as proportionate or reasonable. Again, even if one thinks “something needs to be done” about the “shoplifting epidemic,” one also must concede this story is very much not about the internal business economics of a single retail drug store. It is a political story about the specter of rising crime and weak-on-crime liberalism run amok. This is an undeniable political reality, however much “nuanced” Bay Area liberals wish to thread the needle between their nominal support for Black Lives Matter and their calls to “do something” about shoplifting. Any basic understanding of U.S. history has shown, time and again, in this country the inevitable result of crime panics is more Black and Brown people being put in prisons and jails. The inevitable and obvious political endpoint of this narrative is to (1) repeal Prop 47, which lowers the felony threshold for theft and will thus lead to harsher and longer sentences for larceny and (2) recall reform San Francisco DA Chesa Boudin and, more importantly, send a message to other genuinely progressive prosecutors that they will be swiftly and harshly punished for attempting to reduce jail and prison populations. Which will also, invariably, result in more poor Black and Brown people thrown into our prison meat grinder. This is not up for debate, or a possibility: It is a political certainty. Not, of course, because this is who is doing the actual stealing, but because this is the demographic of people who are disproportionately harmed by a racist criminal legal system. 

The stakes for this narrative could thus not be higher. What happens in California has out-sized weight on the entire country, and the backlash against Black Lives Matter knows of no more potent vehicle than the Walgreens Closing narrative. With these tremendous human stakes in mind—and an understanding that reporters play with live ammunition, and that their reporting has human, material consequences on poor and vulnerable communities—let’s discuss four key plot holes in the Walgreens Are Closing Due to Organized Crime Shoplifting Rings narrative:

  1. If CVS is suffering from the exact same “$45 billion” “organized crime” wave, why have no San Francisco CVS stores closed in all of 2020 or 2021? Why did Walgreens close more stores in New York City in 2020 than San Francisco, where no shoplifting epidemic is said to exist?

If organized shoplifting rings are the primary driving cause of these closures, why does it only result in store closings in one retail brand in one city? Walgreens closed 27 percent of its New York City stores in 2020 compared with 24 percent of its San Francisco stores. Not only did the company close stores at a higher rate in a city where no “organized retail crime wave” was said to have existed in 2020 (though police unions and their allies are trying to contrive one now with little traction outside of right-wing tabloids), this is a fairly clear indication that Walgreens is consolidating its footprint in large urban areas, as it’s repeatedly indicated it was going to do since 2019. 

  1. Walgreens SEC filings repeatedly mention a “Store Optimization Program” involving the closings of hundreds of stores. Why is this almost never mentioned? Why has Walgreens never answered questions about this? 

Since 2017 Walgreens SEC filings to investors make it clear there is an effort to close stores, which has been reported on since 2019. Every one of the company’s quarterly reports since 2018 has included some version of this statement:

On October 24, 2017, the Company’s Board of Directors approved a plan to implement a program (the “Store Optimization Program”) to optimize store locations through the planned closure of approximately 600 stores and related assets within the Company’s Retail Pharmacy USA segment upon completion of the acquisition of certain stores and related assets from Rite Aid. The Company continues to expect to close approximately 750 stores and related assets, of which substantially all have been closed as part of this program. The actions under the Store Optimization Program commenced in March 2018 and are substantially completed with remaining activities expected to complete by end of fiscal 2020. The Store Optimization Program is expected to result in cost savings of approximately $350 million per year to be fully delivered by the end of fiscal 2020.

As Josh Cain of the Southern California News Group notes, its most recent filings indicate this effort is ongoing, with the apparent goal of the hundreds of closings to save billions and offset the company’s sizable real estate liabilities:

The latest SEC filings from Walgreens continue to reference the company’s “Transformational Cost Management Program.” The filings pointed out in 2019, “as the result of the actions related to store closures taken under the Transformational Cost Management Program, the Company expects to record certain material transition adjustments to its retained earnings due to the adoption of the new lease accounting standard

So, again, we have a company that has been (albeit euphemistically) openly discussing its plans to shutter hundreds of stores in its SEC filings for years. And another company, CVS, which has not done this in its SEC filings. And one closed stores in a large, extremely expensive real estate market and the other did not. To be clear, there are fewer CVS stores in San Francisco (roughly 25 compared to 50 down from about 70 pre-closures). But at the rate of closures experienced by Walgreens due to “shoplifting,” CVS should have closed five stores during this same time period. But it did not. 

This clearly implies other factors. So, what are those? 

  1. Obviously, shoplifting does occur—anyone with eyes can see this—but does anyone think it’s the only or dispositive reason for these closings? 

Often when one contests the manifestly shocking idea that Walgreens is closing its San Francisco stores only or largely due to shoplifting, they are accused of denying the existence of shoplifting. A typical knee jerk response that arises any time someone accuses anyone in power of hyping a threat: Are you suggesting the threat is entirely made up? Of course, retailers are experiencing shoplifting in San Francisco—this goes without saying. The relevant political questions are (A) is it increasing since Jan 2020 (when Boudin took office) and (B) is it so apocalyptic that it’s driving out businesses that would otherwise stay. On (A), statistics show shoplifting has gone down in recent years, but the Tough on Crime crowd says this is due to a lack of reporting, which ultimately—and somewhat conveniently—makes the empirical question of “is shoplifting up?” unknowable. On (B) this is a question that couldn’t possibly be known without any indication as to Walgreens’ internal economics, the details of which have been revealed to no one and, as far as I can tell, not been inquired about by any reporters. 

Why is this almost never asked of Walgreens or CVS by any reporter? Why is Walgreens rarely asked to produce any evidence of internal conversations from 2020 showing shoplifting alone is the primary driver of closures? Incidentally, on the same day this piece is being published, SFGATE reporter Eric Ting did ask this question and here’s what happened:

When SFGATE asked Walgreens to directly respond to charges from Preston and others that the chain is weighing other considerations beyond retail theft, the spokesperson stopped returning emails.

A few hours searching old board minutes or internal emails from the Walgreens CFO in the summer of 2020 when the first wave of San Francisco Walgreens were shut down could easily show shoplifting was the company’s reasoning. It’s certainly possible shoplifting played some role in the closings, but there’s a difference between 100% (all the headline claims) or “largely” (sometimes a weasel word thrown in on paragraph 12) and “one of many factors.” Thus far, almost every reporter has been criminally uninterested in any of these other factors. They got the singular, politically useful excuse, printed it in 44 point font and moved on. 

Such a standard would never be permitted to poor, homeless, or Black community leaders. If a Black Lives Matter activist ran to CBS San Francisco or SFGate and told them 90 percent of Black people in San Francisco were racially profiled when entering a CVS, these reporters would demand evidence: CCTV camera footage, the methodology of the study, who was involved. The outlets would disclose their conflicts, interrogate their funders, and examine the past criminal history of those registering the complaint. But when a Fortune 500 company and its lobbying organs assert a self-serving, highly charged claim of shoplifting bedlam, it’s simply printed as fact by hundreds of outlets.  

  1. Walgreens, Target, and CVS fund and work closely with lobbying groups like the California Retail Association and California Chamber of Commerce which have spent millions trying to repeal Prop 47. While it’s not knowable yet, these companies are almost certainly funding efforts to recall DA Boudin. Why is this political context omitted entirely? 

These corporations and their lobbying organs have a clear motive to embellish the role of shoplifting to support a media narrative that suits their agenda, but this conflict is never revealed to readers. Moreover, Walgreens closing dozens of essential lifelines for elderly people and those with disabilities is bad PR, so of course they’re going to want to blame anyone but themselves and their poor business practices. What are they supposed to say: “We’re closing 20 stores because we over-extended our real estate investments in the booming early 2000s, are light on cash, and are seeking to offload debt to look good for investors?” Obviously, blaming others for bad business practices is corporate crisis management 101, all the better if it can dovetail with a broader political aim of fueling Tough on Crime laws that deter shoplifting. How is this clear conflict of interest never mentioned, interrogated, or followed up on at all? The current narrative takes the company’s unpopular business practice of saving money on rent and labor and somehow turns Walgreens into the victim. Naturally, this would be the company’s preferred reading of events. 

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These are the outstanding questions that remain to be answered, and I wish more reporters would ask them. It’s possible I’m entirely off-base, and there are terabytes of internal emails from summer 2020 showing Walgreens execs and security officials and accountants running the numbers and reluctantly realizing they just have no choice but to close stores in San Francisco due entirely—or primarily—to theft; that organized retail gangs were stealing so many millions of dollars worth of razors and over-the-counter drugs the economics simply made sense and the closures were wholly separate from the company’s public announcements of hundreds of closures nationwide. It’s possible there exists an internal powerpoint showing how and why the shoplifting was dispositive. This is entirely possible, as an entirely user-supported media critic operating a substack out of a nearby coffee shop, I have neither the resources nor the time to find these answers myself. But I truly wish someone with the funding, gravitas, and institutional support would follow up on these plot holes and try to get to the bottom of what’s driving this narrative. The human stakes of its ultimate conclusion are not trivial, and the reactionary forces the narrative has unleashed will not be going away soon. Retail lobbyists and their Tough On Crime allies have found an extremely effective narrative vehicle to undermine Black Lives Matter and criminal legal reform efforts, and they will almost certainly attempt to duplicate it elsewhere for years to come.