How concerned should retailers be about shrink?

With the biggest shopping days of the year around the corner, concern around shrink — and, in particular, consumer theft — is growing among retailers. 

In November, California voters passed Proposition 36, which increases punishment for petty crimes including shoplifting. At Glossy’s November Beauty and Wellness Summit in Napa, many attendees pointed to shrink as an increasingly challenging problem at the retail level. In October, the National Retail Federation announced it would not publish its annual shrink report in 2024 and would instead release a report focused on retail theft and violence. 

Shrink does not refer only to consumer theft; it encompasses inventory lost due to reasons other than sales, including shoplifting, internal theft and processing and logistical errors. According to the NRF’s 2022 shrink report, external theft is the largest shrink driver, at 36%, while internal theft and processing errors make up 29% and 27%, respectively. 

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