Inventory shrinkage has long been one of the retail industry's most significant economic challenges. While inflation, rising energy costs and labour shortages often dominate public debate, another issue continues to impose enormous costs on retailers every year:
Shoplifting.
Two recent publications by the EHI Retail Institute prompted me to write this article: An interview with Frank Horst on shoplifting (see https://www.youtube.com/watch?v=A0KW91aBy0w) and the latest "Inventory Differences 2026" study (see https://www.ehi.org/produkt/studie-inventurdifferenzen-2026-pdf/). Together, they provide a clear picture of how serious the situation has become.
The figures speak for themselves.
- Total inventory losses in German retail reached €5.11 billion in 2025.
- €4.33 billion of these losses were caused by theft.
- €3.05 billion resulted from customer shoplifting alone.
€3.05 billion.
This is not a minor inconvenience.
It represents a massive economic loss.
The trend is moving in the wrong direction
In the interview, Frank Horst explains that the value of shoplifting has increased by around 25% over the past three years. Even after adjusting for inflation, theft remains approximately 15% higher than it was three years ago.
This clearly demonstrates that we are not looking at a temporary fluctuation.
The trend has been moving in the wrong direction for years.
However, one figure is even more alarming.
Retailers detect only a fraction of what happens
According to the EHI study, fewer than 2% of all shoplifting incidents are actually detected.
In other words:
Retailers see only a tiny fraction of what is really happening.
This fundamentally changes the discussion.
If the probability of being caught is extremely low, even sophisticated surveillance technology loses much of its deterrent effect.
Organised retail crime
An especially worrying development is the growth of organised retail crime.
According to the EHI, organised criminal groups are responsible for approximately one third of all customer theft losses.
That represents around €1 billion every year.
These are no longer isolated opportunistic thefts.
Professional groups often operate systematically, with clear roles, planning and, in many cases, cross-border structures.
With a detection rate below two percent, simply appearing on a CCTV camera is unlikely to discourage these offenders.
If detection rarely leads to meaningful consequences, technology alone cannot solve the problem.
This raises an important question:
What more can governments, law enforcement agencies and the justice system do to combat organised retail crime effectively?
This is not a question retailers can answer on their own.
Technology alone is not enough
Organised crime, however, represents only part of the overall picture.
If approximately one third of customer theft losses are caused by organised groups, the remaining losses stem largely from what we might describe as conventional shoplifting.
And this is where the discussion changes.
It is no longer solely about technology.
It is also about attitudes and personal responsibility.
Why Shoplifting Affects Everyone
Some people still seem to believe that shoplifting is a victimless offence.
It is not.
Retail theft does not simply hurt anonymous companies.
Its consequences ultimately affect everyone.
Every stolen product creates additional costs.
Those costs do not disappear.
Instead, they contribute to:
- higher retail prices
- increased product protection
- more surveillance
- stricter security procedures
- more complex store processes
- reduced trust
- and a less enjoyable shopping experience for honest customers.
Effective loss prevention goes beyond technology
Retailers must, of course, continue investing in modern loss prevention solutions.
These include:
- intelligent data analytics
- advanced product protection
- AI-powered computer vision
- improved checkout monitoring
- employee training
- clearly defined operational processes
- and optimised store layouts.
I have discussed many of these topics in previous articles on this blog (see Retail Engineering: No scale - no scan?).
However, important as these measures are, they address only part of the challenge.
Technology reaches its limits whenever society begins to tolerate behaviour that causes harm to others.
A change in mindset is also needed
Shoplifting is not a minor offence.
It causes billions in losses every year, weakens businesses and increases costs.
And it ultimately reduces the shopping experience for every honest customer.
Therefore retailers need more than better technology.
They also need:
- effective law enforcement
- stronger action against organised retail crime
- greater public awareness
- and a shared understanding that shoplifting is not a trivial offence.
Conclusion
Modern technologies such as computer vision, AI-powered analytics and intelligent self-checkout solutions will continue to play an increasingly important role in reducing inventory shrinkage.
They enable retailers to detect risks earlier, improve operational processes and respond more effectively to suspicious behaviour.
However, technology alone is not enough.
Shoplifting is not merely a technical or operational issue.
It is also an economic and societal challenge.
That is why successful loss prevention requires more than innovative technology.
It also depends on effective law enforcement, clear legal consequences and a shared commitment to protecting businesses, employees and honest customers alike.