Yes, 'shrinkage' has been mentioned in several recent retailers investor calls. It is a problem. Like all problems, there are eventually solutions. While it is popular to ask for larger political and/or societal changes to address 'shrinkage', like most Nash equilibrium types of situations there will be technological or other changes made by organizations to change the playing field.

Non-political changes can be made quicker and fine tuned whereas waiting for countless local entities to change is a long process. Examples: Amazon's no cashier convenience stores. Bad guys cannot enter without an app linked to a credit card. Lower tech solutions may involve packaging the most theft desirable items in bulky cases removed by cashiers making it harder to take a load of loot out of the store. Of course, this makes for more work and expense for the retailers, another problem to thus be solved with additional innovation or management expertise.

We investors should be looking for companies providing solutions to today's retail 'shrinkage' problems. Anybody know of public companies to study in this field?

Uwharrie

Berkshire Hathaway FAQ

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