Shrink in Retail: Key Trends and Statistics for 2025

Zixuan Lai

·October 30, 2025

·13 min read

Shrink in Retail: Key Trends and Statistics for 2025 — Image Source: pexels

Shrink in retail describes the loss of inventory that retailers cannot account for. In 2025, shrink in retail will cost the industry nearly $100 billion. This challenge affects every retail business. The impact goes beyond lost goods. Shrink in retail leads to higher prices for shoppers, fewer jobs, and less safe stores. Employees in retail face stress and burnout due to theft and violence. The table below shows the effects of shrink in retail on jobs, prices, and safety.

Impact Area	Evidence
Job Losses	Retail shrinkage has led to 658,375 lost jobs and almost $39.3 billion lost in wages and benefits to workers.
Consumer Prices	Increased operational costs due to theft can lead to higher prices for consumers.
Store Safety	42% increase in shoplifting incidents involving threats or actual violence reported.

Key Takeaways

Retail shrinkage will cost the industry nearly $100 billion in 2025, affecting prices, jobs, and store safety.
Shoplifting is the leading cause of retail shrinkage, accounting for about one-third of total losses. Retailers must enhance security measures.
Investing in technology, such as AI and smart cameras, can significantly improve loss prevention and reduce theft incidents.
Employee training is crucial. Regular sessions help staff recognize theft signs and respond effectively, reducing shrinkage rates.
Collaboration with law enforcement and industry partners strengthens defenses against organized retail crime and improves overall security.

Shrink in Retail: Definition and Types

What Is Shrink in Retail?

Shrink in retail describes the loss of inventory that a retailer cannot account for. Major industry organizations define retail shrinkage as the negative difference between reported inventory and the actual inventory in possession. This loss impacts profits and can arise from theft, fraud, waste, human error, and inefficient processes. Retailers in 2025 face increasing challenges due to retail theft and other causes of shrink. Retail shrinkage affects every aspect of retail operations, from supply chain management to customer experience.

Retailers must understand shrink in retail to protect their business. Retail theft remains a leading cause, but errors and fraud also contribute. Retail shrinkage can occur in any retail environment, including grocery stores, clothing shops, and electronics retailers. The importance of managing shrink in retail grows each year as retail theft and other risks evolve. Retailers who ignore shrinkage risk losing revenue and damaging their reputation.

Retail shrinkage is not just about missing products. It signals deeper issues in retail operations, including theft, fraud, and process gaps.

Types: Shoplifting, Errors, and Fraud

Industry experts categorize retail shrinkage into several types. The most common type is external theft, which includes shoplifting and organized retail crime. Internal employee theft also poses a major threat to retailers. Operational or administrative errors, such as incorrect inventory counts or pricing mistakes, lead to additional losses. Fraud, including return scams and vendor fraud, further increases retail shrinkage.

Type of Shrinkage	Description	Percentage of Loss
External theft	Merchandise stolen by customers or organized crime groups, including shoplifting and smash-and-grab.	37%
Internal employee theft	Employees stealing merchandise or manipulating records, often in collusion with external groups.	29%
Operational or administrative errors	Losses due to human error or system failures, such as incorrect inventory counts or pricing mistakes.	N/A
Fraud	Exploiting store systems for financial gain, including return scams and vendor fraud.	N/A

Retailers must address all types of retail shrinkage to reduce losses. Retail theft, both external and internal, continues to rise. Errors and fraud also challenge retailers in 2025. Retail shrinkage affects profitability, store safety, and customer trust. Retailers who invest in prevention strategies can limit the impact of theft and other causes of shrink.

Retail Shrinkage: 2025 Statistics

Global and U.S. Data

Retail shrinkage continues to rise in 2025. Retailers in the United States and worldwide face growing losses. The latest shoplifting statistics and retail crime statistics show a clear upward trend. Retail shrinkage in the U.S. increased from 1.4% of sales in 2022 to 1.6% in 2023. This change resulted in losses of $112.1 billion, up from $93.9 billion the previous year. Experts expect this trend to continue through 2025. Globally, retail shrinkage is projected to reach $132 billion in 2024, compared to $112 billion in 2022.

U.S. retail shrinkage rates rose from 1.4% to 1.6% between 2022 and 2023.
Global retail shrinkage is expected to hit $132 billion in 2024.
Shoplifting incidents and theft remain the main drivers of these losses.
Retailers report a steady increase in shoplifting statistics each year.

The National Retail Federation reports that 78.1% of retailers now prioritize organized retail crime in their strategies. Retailers see shoplifting incidents as a top threat to their business. Shoplifting data shows that these incidents have become more frequent and more costly.

Retailers must track shoplifting statistics and retail shrinkage closely to protect their profits and operations.

Causes: Shoplifting and Beyond

Shoplifting remains the leading cause of retail shrinkage in 2025. Retailers also face losses from employee theft and administrative errors. Shoplifting incidents account for about a third of all retail shrinkage. Employee theft makes up another third. Administrative errors, such as mistakes in inventory counts or data entry, also lead to significant losses.

Cause	Description
Customer Theft (Shoplifting)	The act of taking merchandise without payment, a significant challenge especially during peak seasons.
Employee Theft	Internal theft by employees, which can occur in various areas and often goes undetected.
Administrative Errors	Mistakes in data entry or stock management leading to inventory mismatches, causing significant losses.

Shoplifting incidents make up 36% of total retail shrinkage each year.
Employee theft continues to challenge retailers, often going undetected for long periods.
Administrative errors, while less visible, add up to large losses over time.

Retailers must address all causes of retail shrinkage. Shoplifting statistics show that incidents are rising, especially in urban areas. Retailers also report more complex theft schemes involving both employees and customers. Shoplifting data highlights the need for better prevention and detection methods.

Sector Insights: Clothing, Grocery, and More

Retail shrinkage affects every sector, but some face higher risks. Grocery stores experience the highest rates of retail shrinkage. Perishable departments, including deli, meat, bakery, seafood, dairy, and floral, contribute almost two-thirds of grocery shrinkage. Shoplifting incidents in grocery stores often target high-value or easily concealed items.

Grocery Department	Shrinkage Contribution
Perishable	Almost two-thirds
Deli/Meat	Included in perishable
Bakery	Included in perishable
Seafood	Included in perishable
Dairy	Included in perishable
Floral	Included in perishable

Clothing retailers also report high levels of shoplifting incidents. Shoplifting statistics show that apparel and accessories are frequent targets due to their size and value. Electronics and beauty retailers face similar challenges. Shoplifting incidents in these sectors often involve organized groups.

Shoplifting incidents in clothing and electronics stores have increased over the past year.
Grocery retailers report the highest overall retail shrinkage rates.
Shoplifting statistics reveal that theft is not limited to one sector.

Retailers across all sectors must monitor shoplifting incidents and retail shrinkage. Shoplifting statistics and retail crime statistics help identify trends and target prevention efforts. Retailers who understand sector-specific risks can better protect their inventory and profits.

Trends in Retail Shrinkage for 2025

Organized Retail Crime and Shoplifting

Retailers in 2025 face a surge in organized retail crime and shoplifting. These trends have changed the landscape of retail security. Large-scale theft rings target high-value products and resell them online. Economic strain after the pandemic has led to more theft of basic necessities. Law enforcement shifts resources, which allows organized retail crime groups to exploit gaps in retail security. Online marketplaces make it easy for criminals to sell stolen goods quickly and anonymously.

Trend	Description
Economic Strain	Job losses and financial hardships post-pandemic lead to increased theft of basic necessities.
Organized Gangs	Large-scale rings specialize in stealing high-value products for resale online.
Policing Gaps	Law enforcement reallocates resources, allowing organized crime to exploit vulnerabilities.
Easy Resale Options	Online marketplaces facilitate quick and anonymous sales of stolen goods.
Enhanced Surveillance	Retailers are increasing CCTV coverage and using analytics to detect suspicious behavior.
Staff Training	Training programs can reduce losses by about 15% by teaching employees to identify theft signs.
Locking High-Theft Items	Common products like baby formula and laundry detergent are now locked up in stores.
Store Layout Adjustments	Retailers are rearranging aisles to improve visibility and deter theft.
Sales Impact	Locking up merchandise can lead to a sales drop of 15% to 25%, affecting customer experience.
Organized Crime Impact	Organized crime rings can significantly harm small businesses, exploiting their security weaknesses.

Shoplifting trends show a 21% rise in repeat offender events from 2023 to 2024. Retailers report that 73% of shoplifters now act with more violence and aggression. Organized retail crime incidents increased by 57% for retailers with tracking systems. Retailers express greater concern about shoplifting connected to organized retail crime than in previous years.

In November 2024, authorities dismantled a shoplifting ring in New York that stole nearly $2 million in merchandise from major retailers and resold items both domestically and internationally.

Retail security teams must adapt to these evolving shoplifting trends. Enhanced surveillance and staff training help reduce losses. However, locking up merchandise can lower sales and affect customer experience. Organized retail crime continues to exploit weaknesses in retail security, especially in small businesses.

Technology: Prevention and Risks

Technology plays a key role in retail security and prevention strategies. Retailers use AI and automation to address organized retail crime and shoplifting. New camera technologies, such as edge cameras and facial recognition, improve loss prevention. Systems like Appriss Secure EBR integrate data from multiple sources, helping retailers make better decisions. AI-driven tools identify patterns in large datasets, which increases efficiency in loss prevention.

Advancements in AI and automation help retailers fight organized retail crime and fraud.
Edge cameras and facial recognition enhance retail security and prevention.
Cloud-based platforms and biometric access control reshape retail security strategies.
AI-driven video analytics support loss prevention by detecting suspicious behavior.

Retailers must balance technology adoption with careful monitoring. Over-reliance on automated systems can create new risks. If retailers do not monitor these systems, incidents of theft may go unnoticed. Retail theft is projected to cost retailers $132 billion in 2024, showing the need for effective prevention and retail security solutions.

Retailers continue to invest in technology to improve retail security and shoplifting prevention. However, they must train staff and monitor systems to avoid gaps in retail security. Technology alone cannot solve all shoplifting trends and organized retail crime challenges.

Supply Chain and Process Gaps

Supply chain vulnerabilities contribute to retail shrinkage and shoplifting trends. Retailers face increased costs and product availability issues due to bottlenecks and labor shortages. Cargo theft has become more common, adding to retail shrinkage. Labor shortages make it harder for retailers to deliver products on time and maintain retail security.

Evidence Type	Description
Increased Costs	Supply chain vulnerabilities lead to higher operational costs for retailers.
Product Availability Issues	Bottlenecks in the supply chain slow down shipment and delivery times for high-demand products.
Cargo Theft	An increase in cargo theft has been reported, contributing to retail shrinkage.
Labor Shortages	Labor shortages exacerbate supply chain challenges, affecting product availability and delivery.

Retailers use automated technologies and predictive analytics to manage inventory and improve retail security. Diversifying suppliers and building strong relationships with vendors help retailers strengthen supply chain resilience. Retailers focus on improving product delivery solutions to meet customer demands and reduce retail shrinkage.

Process gaps also affect retail shrinkage. Mislabeling and missing shipments create inventory inaccuracies. Mishandling at distribution centers increases losses. A one-size-fits-all supply chain management system complicates coordination among stakeholders. These inefficiencies hurt inventory accuracy and customer satisfaction.

Retailers must address supply chain and process gaps to improve retail security and reduce shoplifting trends. Effective prevention strategies require strong supply chain management and accurate inventory tracking.

Consumer Behavior Shifts

Consumer behavior continues to influence shoplifting trends and retail shrinkage. Economic uncertainty leads some individuals to steal basic necessities. Changes in shopping habits, such as increased self-checkout use, create new opportunities for theft. Retailers notice that shoplifting incidents often involve repeat offenders who target high-value items.

Retailers respond by adjusting store layouts and locking up high-theft products. These changes improve retail security but can lower sales and affect customer experience. Staff training helps employees spot signs of theft and respond quickly. Retailers must balance retail security with customer satisfaction to address shoplifting trends.

Retailers monitor consumer behavior to identify new shoplifting trends and adapt prevention strategies. Organized retail crime groups continue to exploit changes in shopping habits and retail security gaps. Retailers must stay alert to evolving consumer behavior and shoplifting trends to protect their business.

Impact of Retail Shrinkage

Financial and Operational Effects

Retail shrinkage creates a direct financial impact on businesses. Inventory losses mean retailers cannot sell products, which reduces potential revenue. These losses go beyond missing items on shelves. Retailers must invest more in loss prevention strategies and employee training to address ongoing incidents. Understanding the cost of shrinkage helps companies create better plans to protect profits. Retail sectors such as drug, grocery, and mass merchandise lose about 2% of revenue to shrink each year. Automated data integration can improve data accuracy by 30% and cut operational costs by 25%. Enhanced employee training and advanced surveillance systems play a key role in reducing incidents and improving operational performance. Retailers see that every incident of shoplifting or theft adds to overall losses, making prevention a top priority.

Jobs, Prices, and Store Safety

Shoplifting incidents and other forms of theft force retailers to make tough choices. Higher operational costs from losses often lead to price increases for consumers. Many shoppers notice these changes at checkout. Retailers sometimes reduce staff or cut hours to offset losses, which can affect job security. High rates of employee theft can also harm trust between workers and managers. Store safety becomes a bigger concern as incidents of shoplifting and theft rise. Retailers respond by locking up merchandise and increasing security presence. Self-checkout theft now accounts for up to 25% of unknown store losses. Some stores remove self-checkout options to reduce incidents. Cargo theft is also growing, with nearly half of loss prevention executives saying it is a bigger issue this year. Experts note that retailers must rethink technology and staffing in self-checkout areas to balance customer experience and security.

Reputational Risks

Retail shrinkage does not only cause financial losses. Frequent incidents of shoplifting and theft can damage a retailer’s reputation. Customers may feel unsafe if they see many security measures or hear about repeated incidents. Negative news about shoplifting losses or security breaches can spread quickly, especially online. Retailers risk losing customer trust if they cannot control incidents or protect their stores. Retail theft insights show that shoppers prefer stores where they feel safe and valued. Companies that fail to address losses and security concerns may see fewer customers and lower sales. Retailers must act quickly to manage incidents and protect their brand image.

Reducing Shrink in Retail: Strategies for 2025

Technology and Analytics

Retailers use advanced technology and analytics to fight shoplifting and improve security. Artificial intelligence helps identify suspicious behavior and track inventory in real time. Smart cameras and facial recognition systems alert staff to possible shoplifting incidents. Retailers rely on cloud-based platforms to share data across locations, making it easier to spot patterns in retail theft prevention. Automated systems reduce errors and improve accuracy in inventory counts. Retail security solutions now include predictive analytics, which help retailers anticipate shoplifting risks before they happen.

Tip: Retailers who invest in technology see faster response times and fewer losses from shoplifting.

Employee Training and Controls

Employee training plays a key role in loss prevention. Retailers teach staff how to recognize shoplifting and respond safely. Regular training sessions keep employees updated on new shoplifting tactics. Internal controls, such as segregation of duties and regular audits, minimize opportunities for theft and errors. Employee monitoring creates a culture of transparency and accountability, which deters dishonest behavior. Periodic calculation of shrinkage rates helps retailers monitor inventory and spot unexpected increases. Studies show that 37.5% of employees have stolen from their employer at least twice, highlighting the need for strong controls.

Segregation of duties prevents one person from controlling all inventory processes.
Regular audits catch errors and discourage theft.
Employee monitoring builds trust and reduces shoplifting incidents.

Policy and Industry Collaboration

Retailers work together to address shoplifting and security challenges. Industry groups share best practices for retail theft prevention and loss prevention. Retailers partner with law enforcement to target organized shoplifting rings. Policy changes, such as stricter penalties for shoplifting, help deter repeat offenders. Collaboration with suppliers improves product tracking and reduces supply chain vulnerabilities. Retailers join forces to develop new retail security solutions and share data on shoplifting trends.

Collaboration Type	Benefit
Industry Partnerships	Share best practices
Law Enforcement	Target organized shoplifting
Supplier Collaboration	Improve product tracking

Retailers who focus on technology, employee training, and collaboration build stronger defenses against shoplifting and retail shrinkage.

Retail shrinkage in 2025 shows a sharp rise in shoplifting, now making up 36.5% of losses. Organized retail crime and insider theft add to the challenge. Key strategies include:

Using advanced technology and automation
Training employees and working with law enforcement
Analyzing sales data and customer behavior

Year	Trend Description	Source
2025	Retailers expect shrink rates to improve with new strategies.	Dollar General Report

Retailers who adapt quickly will better protect profits and meet changing consumer needs.

FAQ

What is the main cause of retail shrinkage in 2025?

Shoplifting remains the leading cause of retail shrinkage. Organized retail crime groups and repeat offenders target high-value items. Retailers report that theft accounts for over one-third of total losses.

How does retail shrinkage affect consumers?

Retail shrinkage increases costs for retailers. They often raise prices to cover these losses. Shoppers may also see more security measures in stores, which can affect the shopping experience.

Which retail sectors face the highest shrinkage rates?

Grocery stores experience the highest shrinkage rates. Perishable departments, such as meat and dairy, contribute most. Clothing and electronics retailers also report frequent theft incidents.

What strategies help reduce retail shrinkage?

Retailers use technology, employee training, and collaboration with law enforcement to fight shrinkage.
Smart cameras, regular audits, and strong internal controls help prevent losses.