Retail loves a villain. And for decades, shrink has been our go-to bad guy — responsible for $121.6 billion in industry losses (depending upon whom you ask). It’s a clean narrative. It rallies urgency. It opens budget.
But here’s the thought-crime of the day:
What if shrink isn’t the real problem?
What if it’s a symptom — and we’re medicating the fever while the infection spreads?
Loss Prevention (LP) teams have become the pressure valve for every business concern. Profits are down? Must be shrink. Labor is tight? Shrink. Missing sales projections? Shrink again. At this point, shrink is blamed for everything short of climate change.
But peel back the metrics, and shrink is actually telling us something: We are failing at the fundamentals of trust, execution, and operational design.
And we keep ignoring the message.
Shrink Isn’t One Problem — So Why Do We Attack It Like It Is?
We keep treating shrink like it’s uniformly driven by theft. But some industry data shows:
- 37% of shrink stems from process failures and paperwork errors
- 28% comes from employee theft
- 25% comes from external theft
- The rest is vendor fraud and “unknowns”
Translation: up to 2/3 of shrink is controllable through better execution — not handcuffs, not more cameras.
We chase boosters like an action movie, but the real leaks are boring: inventory accuracy, training, data quality, replenishment errors.
We’ve been solving the most dramatic part of shrink, not the biggest part.
Is that strategic?
Fortress Retail Is Costing Us More Than Theft
Locking up product has become the default corporate reflex. But multiple studies (Target, Forrester, RILA) point to the same reality:
- Locking a product can slash legitimate sales by 15–25%
- Customers leave aisles within 15 seconds if service isn’t immediate
- 60% of shoppers would rather abandon the purchase than wait for help
Shrink goes down? Maybe.
But lost sales go way up.
That’s not mitigation — that’s misdirection. We moved the loss column and celebrated. Meanwhile, e-commerce says thank you for the traffic.
We’ve created stores customers no longer want to shop in… to prevent theft by customers who no longer shop there.
Is ORC Really the Biggest Threat?
Organized Retail Crime is dangerous, visible, and politically charged — which means it dominates headlines. But let’s zoom out:
- Retail crime (ORC + opportunistic theft) increased 19% year-over-year
- Inventory inaccuracy costs retailers 2–3% of total sales annually
- Employee disengagement is linked to a 10%+ increase in operational errors
Put plainly:
ORC grabs news coverage.
Apathy drains profitability.
LP can deter criminals. But can we fix a broken culture? Because that’s where a huge portion of shrink is hiding.
Maybe LP Needs a Rebrand
Our job has already evolved — the title just hasn’t caught up. Today’s LP is:
- Data science: pattern analysis, predictive exception reporting
- Process improvement: fixing the leak vs. mopping the floor
- Customer experience protection: friction is a form of loss
- Brand safety: retail crime now impacts investor confidence
- Workplace safety: incidents up 18% in frontline retail last year
What if LP became…
Sales Protection instead of Asset Protection?
Revenue Protection instead of Loss Prevention?
Because here’s the truth: shrink doesn’t matter if the store can’t sell.
A New Strategy — Change My Mind
Here’s the uncomfortable pivot:
- Treat shrink like a symptom
Every variance is a data breadcrumb. - Measure total loss of opportunity
Not just prevented theft — prevented sales. - Fund customer convenience, not barriers
Friction is the tax good shoppers pay for bad behavior. - Invest in the frontline first
Engaged employees protect assets automatically.
Shrink is a signal.
It’s flashing red.
And it isn’t saying, “More locks.”
It’s saying, “Your retail model is breaking.”
If shrink were truly the biggest threat in for the retail LP profession, then the last decade of escalating security investments should have solved the problem.
Instead, it’s worse.
Stores are harder to shop.
Margins are thinner.
Customers are gone.
Maybe the villain isn’t shrink.
Maybe the villain is our obsession with shrink.
Perhaps I am dead wrong. If that is the case, then please feel free to Change My Mind.
Send all comments to: david@calibrationgroup.com
If your comment gets listed in the TalkLPnews Retail Rundown for the remainder of the week, it will be listed as “anonymous.”
David E. George, CFE, CFI, is the Managing Partner of Calibration Group, Inc., and of its subsidiary, TalkLPnews. Previously, David served as Vice President of Asset Protection for Dollar General Stores, a company with more than 20,000 stores in 48 states. While serving Dollar General, David was responsible for the Asset Protection field team, the Asset Protection corporate team, the Shrink Improvement team, and the Shrink Analytics team.
Prior to Dollar General, David held the Vice President of Asset Protection position with Harris Teeter Supermarkets, Inc., a regional chain based in Charlotte, NC. He served Harris Teeter for more than 14 years and has had previous loss prevention leadership roles with Kmart Supercenters.
For more information about Calibration Group, visit www.calibrationgroup.com.