Retailing and Shrinkage in Context

In this chapter we intend to put the issue of shrinkage within the broader context of developments in the retailing industry. We think this is a worthwhile exercise for a number of reasons. First, as we will discuss below, retailing has gone through a series of dramatic changes in the way in which it is organised and operates and these changes have undoubtedly had an impact upon the way in which not only shrinkage affects retail companies, but also the way in which they respond to the problem. The growth of mass merchandising, consumerism, open sale formats and many other changes have all had an impact upon how shrinkage affects retail organisations and we feel it is important to outline what these are in terms of managing shrinkage. Secondly, these changes have informed the way in which we have developed New Loss Prevention — it would be naive to propose new ways of managing shrinkage unless this broader context was fully recognised and understood, particularly in terms of how retailing and shrinkage management is likely to evolve in the future.