Strategic Resource Group managing director Burt Flickinger warned on Thursday that rising retail crime “is going to compromise the supply chain, crush the economy and catalyze the next recession.”
Flickinger argued on “Mornings with Maria” on Thursday that thefts lead to “higher retail prices and massive out of stocks, which compromise the consumer and the economy concomitantly.”
He made the comments in response to railroad company Union Pacific (UP) saying it has experienced a 160% increase in criminal rail theft in Los Angeles County over the past year. The company estimates more than 90 packages are compromised per day.
“In several months during that period, the increase from the previous year surpassed 200%. In October 2021 alone, the increase was 356% over compared to October 2020,” UP’s state director of public affairs, Adrian Guerrero, noted.
The thefts amounted to more than $5 million in damages to UP alone, which does not include damages to customers or consumers.
Los Angeles photojournalist John Schreiber shared footage of train tracks belonging to UP in the Lincoln Heights neighborhood of Los Angeles and described “looted packages as far as the eye can see,” including “Amazon packages, UPS boxes, unused COVID tests, fishing lures, epi pens,” he said in a tweet last Thursday.
Also plaguing the retail sector, the surge in smash-and-grab robberies that have been on the rise throughout the United States in recent months and years.
SMASH-AND-GRAB CRIME WAVE DISRUPTING RETAIL AHEAD OF BUSY SHOPPING SEASON
More than half of retailers nationwide, 57%, said that there has been more organized retail crime since the pandemic began, according to a survey conducted last year by the National Retail Federation.
On Thursday, Flickinger also weighed in on rising oil prices and its added impact on the retail sector.
“Higher oil prices are already affecting consumer confidence and spending,” he told host Maria Bartiromo, noting that the University of Michigan’s Index of Consumer Sentiment posted a 2.5% loss this month compared to the month before, falling to 68.8, the second-lowest level in a decade.
On Thursday, benchmark U.S. crude lost 28 cents, dropping to $86.68 per barrel in electronic trading on the New York Mercantile Exchange, but is still up by more than 60% from the same time last year.
Goldman Sachs is now forecasting oil prices will rise above $100 per barrel later this year, signaling higher gas prices are on the horizon, Reuters reported.
“Consumers are cutting back because of inflation,” Flickinger argued. “They’re having trouble feeding their families, getting gas and paying their rent, so rising prices are really going to affect the economy [and] affect retail.”
He then warned that retailers have been forced to “pass along inflation” to consumers and that rising prices are “really going to put a rain cloud over the economy for the foreseeable future.”
Flickinger provided the insight one week after it was revealed inflation rose at the fastest pace in nearly four decades in December, as rapid price gains fueled consumer fears about the economy.
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The consumer price index rose 7% in December from a year ago, according to a new Labor Department report released Wednesday, marking the fastest increase since June 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.5% in the one-month period from November.
Economists expected the index to show that prices surged 7% in December from the year-ago period and 0.4% from the previous month.
Price increases were widespread. Although energy prices fell 1.1% in December from the previous month, they’re still up 29.3% from last year. Gasoline, on average, costs 49.6% more than it did last year. Food prices have also climbed 6.3% higher over the year.
FOX Business’ Megan Henney, Paul Best and Audrey Conklin contributed to this report.