The pandemic-triggered and war-fueled economic slowdown has increased the incidents of theft and organized crime at American retailers. Consumer electronics giant Best Buy Co. (NYSE:BBY) and home improvement retailer Home Depot (NYSE:HD) have resorted to extreme measures to protect their stock from theft, including locking them up in storage, a WSJ report stated. In the long run, these measures could help boost BBY and HD stocks.
Retail thefts have surpassed pre-pandemic levels in certain parts of the U.S. Thus, retailers are resorting to tactics to protect their products. Several shelves are left empty with signs directing shoppers to ask the support staff for help with the product. Retailers are also using tricks such as placing frequently stolen items closer to staffed registers to avoid thefts. However, the shortage of staff post-pandemic has also left fewer security personnel to police the stores.
Notably, these steps have reduced the consumer’s overall shopping experience, especially with products like electronics, which buyers enjoy testing before making a purchase. Moreover, this also hampers retailers’ sales as consumers are deprived of impulsive shopping sprees.
Nonetheless, consumers’ shifting preference for online shopping has salvaged the retailers’ margins to a certain extent, as they can directly deliver these goods to consumers’ homes without hindering their in-shop experience.
Best Buy Locks Up High-Value Electronics
Best Buy is locking up high-value electronics that are frequently stolen, like Bose speakers and Fitbit trackers, in certain suburban stores of Houston. The retailer typically locks up less than 5% of its products in storage. The retailer is also using QR codes on shelves to scan and directly pick up the products at the checkout counter.
Is Best Buy a Good Stock?
On TipRanks, BBY stock has a Hold consensus rating. This is based on six Buys, eight Holds, and three Sells. The average Best Buy price target of $78.77 implies 20.4% upside potential to current levels. Meanwhile, the stock has lost 33.8% so far this year.
Home Depot Locks Up High-Risk Goods
Home Depot is trying more consumer-friendly and high-tech solutions to avoid locking up goods like using sensors and alarms at exits. Usually, HD tracks high-risk products and locks them up in areas where they experience the highest thefts.
Is Home Depot Stock a Buy or Sell?
On TipRanks, HD stock commands a Strong Buy consensus rating. This is based on 15 Buys versus three Holds. The average Home Depot price forecast of $362.53 implies 34.9% upside potential to current levels. Meanwhile, the stock has lost 33% year to date.
