Shrinkage is the gap between what your inventory records say you should have and what's actually on the shelf. Here's how to calculate the percentage, and why the number alone doesn't tell you what caused it.
| Expected inventory value | $52,000 |
| Actual counted value | $51,688 |
| Shrinkage % | 0.6% |
($52,000 − $51,688) ÷ $52,000 × 100 = 0.6%. Retailers commonly aim to keep shrink under roughly 1-2% of inventory value, though the acceptable range depends heavily on category — high-theft categories run hotter than others, so use your own historical baseline as the real reference point.
A store-wide shrink percentage tells you that something is off, but not where. Two stores can both show 1.2% shrink — one from a single high-theft zone bleeding heavily, the other from small administrative errors spread evenly across the store. Those are completely different problems with completely different fixes. Breaking shrink down by zone or category (expected vs. counted stock, area by area) is what turns the number from a mystery line on the P&L into something you can actually act on.
Retail Ops OS rolls up expected vs. counted stock by zone, flags what's actually worth a second look, and tracks shrink alongside labor and sales — automatically, from your weekly numbers.
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