Exactly. Inventory loss is an expense just like any other of the company (cf. rent, utilities, labor, etc.). For those retailers operating on a thin profit margin, an increase in inventory loss expense affects profits just like an increase in rent, utility, or labor expenses.
Sure, but people understand negative numbers. The pony is that if my profit margins are slim, then a smallish loss in theft can be a big deal. Comparing theft loss to gross sales just obscures the reality.
People may understand negative numbers, but if I read a title that said "Retail theft accounts for -15% of net profit for Walmart", I'd be pretty confused.
Hell, I'd say comparing theft to gross sales is most fitting comparison, as it's the cost that the consumer actually sees. 50% of gross sales would mean for each 2 sales of an item, 1 gets stolen. Maybe it doesn't give a good view of how much it impacts a business with theft being priced in, but it sure does paint a good picture of how much theft happens.
You can easily avoid negative percentages by rephrasing. e.g., "Walmart profits are down 15% because of retail theft."
Theft loss makes sense to present in relation to profits because the thieves in these cases resell the goods. The profits that the retailer would have made are literally transferred to the thief. The retailer still has its fixed expenses (rent, utilities, labor), so the theft basically comes directly out of the bottom line.