The gap between recorded inventory and stock actually available, caused by factors such as theft, damage or recording errors.
Retailers identify shrinkage by comparing recorded inventory with the stock physically available. A shortfall can arise through theft, misplaced goods or administrative errors, so the difference alone does not establish its cause. Measuring it gives staff a starting point for investigating discrepancies and improving stock handling. A shrinkage percentage can be calculated by dividing the inventory shortfall by recorded inventory and multiplying by 100, using a consistent basis for both figures. Shrinkage describes an inventory loss, while loss prevention covers the procedures and actions intended to reduce such losses.
In job listings
Hermès’ Stock Manager role in London referred to annual stocktake and cycle count results, including discrepancy numbers and shrinkage rate. This places the term within the assessment of inventory accuracy, where counting establishes the difference between the stock a business records and the stock it can account for. Search local jobs for “shrinkage”.
