Shrinkage (stock variance)

Shrinkage — also called stock variance — is what falls between two numbers: theoretical stock, what you should have left if every sale used exactly its recipe, and actual stock, what a physical count puts in front of you. The difference is product you paid for but can't trace to sales. Bars are especially exposed; industry estimates put alcohol shrinkage as high as 20% of inventory (Sculpture Hospitality, Backbar).

Most of it is not theft. The usual culprits are heavy free-pours, spillage, unrecorded comps and staff drinks, breakage, and over-portioning on the line — quiet operational drift that never shows up until Monday's count. Expressed as a percentage, variance = (theoretical − actual) ÷ theoretical, and a healthy bar keeps it low single digits, not double.

The common mistake is to blame every missing bottle on theft, then chase the wrong fix. Measure first: jigger your pours, log every comp and spill, count consistently, and most of the gap closes on its own. What you stop losing to drift drops straight back to margin.