Introduction

Abstract

The term’ shrinkage’ usually refers to something becoming smaller or a gradual contraction over time — an impact not considered to be serious or of much concern. Within the world of retailing and loss prevention, however, it has a much more significant meaning although achieving agreement on precisely what that meaning is, as will be discussed in this book, has proven highly illusive for those working in the field or studying the subject. Generally speaking it is used as a catch-all phrase to categorise the financial losses that retailers face through spoilage, damage, error and theft. It incorporates a highly disparate group of activities ranging from apples going out of date to organised gangs of thieves clearing shelves of high value ink jet cartridges. Its scale is truly extraordinary and rarely fails to shock the uninitiated. For instance, the Global Retail Theft Barometer, a survey of retailers which covered 36 countries in Africa, Asia Pacific, Europe, North America and Latin America, provides a relatively recent attempt to measure the scale of the problem and concluded that the annual cost of shrinkage in these countries was $104.5 billion (Bamfield, 2008). Such an enormous number is difficult to comprehend until you consider that it is almost equivalent to the combined Gross Domestic Product (GDP) of two countries — Luxembourg and Vietnam (World Bank, 2009).