FAQs

Why does the industry still use the terms shrink or shrinkage?

The origins of the word ‘shrinkage’ seems to have been traced back to the UK Co-operative Movement in the 1860s and from there it began to be adopted in other countries as a term to describe the difference between expected and actual retail sales, based upon a valuation of delivered inventory compared with actual inventory in the business. Other writers refer to ‘shortages’, ‘inventory shrink’, ‘inventory shortage’, ‘retail inventory loss’, or simply ‘loss’ rather than ‘shrinkage’ although they all seem to be essentially trying to describe the same sort of thing. So, it is a longstanding and enduring term used to describe a varying basket of retail losses.


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