In the retail world, shrinkage is a silent enemy that eats into margins, weakens profitability and weighs heavily on sales. Two categories dominate: external theft (customers / visitors / shoplifting) and internal theft (employees, collaborators, fraudulent errors). Understanding the difference - and the strategy for dealing with it - is essential.
What are the proportions?
Recent studies show that :
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By 2024, retailers in Canada will lose around 1.6% of their annual sales to inventory shrinkage, representing over $9 billion in avoidable losses. GardaWorld Security+1
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Another source indicates that internal theft accounts for approximately 25.2% of retail inventory losses in Canada. ViewTech
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While international studies indicate that external theft (including shoplifting and organized theft) accounts for 30% to 40% of total inventory loss. Protiviti+1
So, while external theft often attracts media attention, internal theft - often more discreet - accounts for a significant and often underestimated share of losses.
External theft: thieves enter, leave, take away
External theft includes shoplifting, organized theft and criminal groups targeting stores for resale. These incidents are on the rise in Canada: a February 2025 survey reveals that Canadian retailers are "facing a growing crisis" of external theft, both organized and unorganized. Retail Insider
For example: a suspect spotted "swarming" a department, or organized groups targeting several stores. Retail pays the price in stolen goods, but also in additional costs (security, hidden losses, higher prices to compensate).
Internal theft: the silent evil behind the scenes
Internal theft occurs when an employee or co-worker diverts goods, alters sales, makes fraudulent refunds, or "gives away" products to friends/family. This type of theft is difficult to detect because it occurs behind the scenes.
A Canadian study indicates that employees account for a quarter of inventory losses. ViewTech
And recent developments show that operational control processes, checkout errors and poorly managed returns reinforce this vulnerability. As one report puts it, "Without a comprehensive strategy, losses from internal theft will continue to climb." EY+1
Why is this double threat growing?
A number of factors are converging: the rise of online trading, which enables stolen goods to be resold quickly; economic pressure, which encourages some to cross the line; the weakness of prevention measures in some organizations; and the absence of dissuasive sanctions. The result: a loss that is no longer confined to petty theft, but affects the entire chain. Retail Insider+1
What to do? The importance of a robust electronic security infrastructure
To reduce both external and internal theft, a comprehensive approach is required. A good electronic security infrastructure - 4K cameras, intelligent surveillance, access control systems, real-time alerts - makes it possible to :
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rapidly detect suspicious internal or external activity
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record usable evidence (image, movement, flow)
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deterrence through visibility and technology
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strengthen internal processes, traceability and accountability
At CS Security, we help businesses (grocery stores, pharmacies, chain stores, etc.) analyze their existing system, identify vulnerabilities (external or internal theft), and propose a customized solution. Take the plunge: contact us now for a complete analysis of your security system - you'll be amazed at what it can reveal... and prevent.
