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Shrinkage Rate Calculator

Work out shrinkage rate instantly with clear inputs, formula shown and shareable results.

About Shrinkage Rate Calculator

Shrinkage is the gap between book and physical inventory, expressed as a percentage of sales. Splitting it into known wastage and unexplained loss is what makes it actionable: known loss is a process problem, unknown loss points to theft or systematic recording errors.

Formulas

Total shrinkage

Shrinkage = Book inventory - Physical inventory

Shrinkage rate

Rate % = Total shrinkage / Annual sales x 100

Worked example

With the default values below, Shrinkage Rate Calculator returns Shrinkage as % of sales of 0.667%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Book inventory value
12,400,000
Physical count value
12,080,000
Annual sales at retail
48,000,000
Known and recorded wastage
95,000

Results

Shrinkage as % of sales
0.667%
Total shrinkage value
$320,000.00
Unknown (unexplained) loss
$225,000.00
Known loss as % of total shrinkage
29.69%

Step by step

  1. 1Values used
  2. 2Total shrinkage
  3. 3Shrinkage rate
  4. 4Shrinkage as % of sales= 0.667
  5. 5Total shrinkage value= 320,000.00
  6. 6Unknown (unexplained) loss= 225,000.00
  7. 7Known loss as % of total shrinkage= 29.69

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

What shrinkage rate is normal?

Around 1-2% of sales across most retail, higher in apparel and pharmacy and lower in furniture and big-ticket goods.

Why express it against sales rather than inventory?

Because it makes stores of different stock turn comparable, and because shrinkage scales with throughput rather than with the stockholding.

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