Shrinkage (retail)

Where shrinkage comes from

The standard breakdown has four parts: external theft (shoplifting), internal theft, administrative error (miscounts, mislabelled deliveries, till mistakes) and damage or spoilage. Theft is a cause of shrinkage, not a synonym for it, and a fair share of the gap is honest error. However it arrives, shrinkage is death by a thousand small losses. A few missing items a day walks thousands of pounds out of the door in a year.

How shrinkage is measured

Stocktake variance. The books say what should be on the shelves, the count says what is, and shrinkage is the difference, usually expressed as a percentage of sales. That's also its weakness as a number: it tells you how much went missing, months later, and nothing about how, when or from where.

Why most of it is on camera and unwatched

Nearly everything shrinkage covers happens in front of a working camera. The footage exists; it just never gets watched, because nobody has three spare hours to scrub through a shift on the off-chance of catching something. Searchable footage changes the economics of looking. In Svid, the Theft Watch check flags concealment as it happens, and the Shrinkage Heatmap report maps where the losses cluster.