Target has seen its “shrink” – an industry term for lost inventory from behaviors such as shoplifting – return to pre-pandemic levels after a rash of thefts had plagued stores in recent years, according to a report.

At the height of the supply chain crisis spurred by the COVID-19 pandemic, Target executives said the store’s 2022 profits would be reduced by $600 million due to shrink, which is the loss of inventory between manufacturing and point and sale.

Target Chief Financial Officer Jim Lee said during the company’s annual investors day on March 3 that the reduction of shrink was “a testament to the great work of our team, along with the industry and community efforts to combat retail theft across the country.”

Shrink measures the difference between what a store’s inventory records show is available, and what is actually stocked on the store’s shelves. It can be caused by thefts, items getting damaged, human data entry error and vendor issues.

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Target isn’t the only retailer to notice a recent decrease in shrink.

“Shrink has been going down for at least the last year across all major retailers, and everybody’s high-fiving. But the most significant contributor is inventory predictability and stability,” Brand Elverston, an independent retail consultant, told the Minnesota Star Tribune.

However, policies such as tariffs and price increases could potentially cause the shrink levels to go up once again, according to the report.

Retailers, including Minnesota-based Target, conduct annual inventory counts, and any unexplained discrepancy is recorded as shrink.

Theft has taken much of the blame because it’s “sexy and gets all the attention,” Elverston told the newspaper, later adding that he believes losses are likely split between theft and operational errors.

Large-scale supply chain disruptions during the pandemic, including unpredictable shipping timelines, left retailers struggling to keep shelves stocked. As a result, many companies ordered extra inventory to try and prevent shortages, Elverston said.

However, many companies that were struggling to fill shelves during the pandemic suddenly had too much inventory by 2022, potentially raising their shrink numbers. That year, Target reported its inventory was 43 percent higher than the year before and began cutting prices, according to the report.

“Target was not alone in that challenge,” Elverston said. “Everybody was under inventory management pressure that they had never experienced before. But when inventory levels go up, you exponentially increase your risk for whatever your sources of shrink are.”

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Now on the other side of that battle, Target entered 2026 “with healthy underlying margin rates and appropriate inventory levels across our assortment,” according to Lee, the chief financial officer.

It was not immediately clear if Target attributed lower shrink levels to fewer thefts. The Independent has contacted Target seeking more information.

The Tribune report comes as Target has reported another quarter of declining sales and profits, as the retailer struggles to regain its footing with customers grappling with widespread price increases.

Target’s new CEO, Michael Fiddelke, told the Associated Press earlier this month that the company plans to spend billions of dollars to boost sales and regain its image as a fun place to shop for clothing and other products.

Despite its troubles, the retailer plans to open more than 30 new stores across the U.S., one of which will be its 2,000th location.

The big box retailer plans to open 300 new stores by 2035.