What is Shrinkage in Retail? Explained

Shrinkage in retail signifies the loss of inventory between the point of purchase from a supplier and the actual sale to the customer. This loss can arise from theft, damaged goods, administrative errors, and inefficiencies in inventory management. Shrinkage poses a significant concern for retailers as it directly impacts profitability. Minimizing shrinkage involves implementing security measures, improving inventory control systems, and training staff on loss prevention strategies. Regular audits and monitoring inventory discrepancies help retailers identify and address the root causes of shrinkage in their operations, safeguarding profitability and enhancing overall efficiency.