Insurance is not a factor. Large retailers don't carry insurance policies for shoplifting and minor vandalism.
Moonlighting police officers are better trained and cost a lot more money. But it still makes sense to me for the stores to spend this money, as opposed to taxpayers paying for more police in an effort to prevent and/or interdict these property crimes at these stores, something the police force was never designed to do, nor is legally obligated to do.
If a city has descended so far into anarchy that taxpayers think that crime prevention and interdiction isn't worth spending money on then that city is ultimately doomed. The retailers are just going to leave and online purchasing will become the only option for most consumers products. The profit margins on laundry detergent and baby formula are just too low to cover a high level of private security.
I guess ultimately it's up to the voters in San Francisco and/or California to agree on how to address this? I did see that their police force may be under-sized compared to other cities. It seems they would need to agree to hire more police and court personnel, and build more jails, which would require raising taxes, or cutting some other services. There may be lots of people opposed, given the already high taxes and disagreement over related social problems and policing in general.
It's interesting how many people who do not live in San Francisco are so offended by what is happening there. It's always been a dynamic place, and still is, for better and worse.
Not saying its right or wrong, but its gotten to that point there.