Shrinkage is generally a euphemism for theft. It describes a phenomenon in which the value of actual inventory runs lower than recorded inventory, due to an unexplained reduction in the number of units held.

This measure is typically calculated as a monetary figure or as a percentage of total stock value.[1]



  1. ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.

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