How could you possibly know that.

Retailers have no reason to report crime they do not expect to be investigated or prosecuted.

Don't say insurance because nobody is reporting shoplifting to their insurance.

The falling shrinkage is a good indicator, although it’s imperfect for obvious reasons. Of course, there are anomalies like COVID, but otherwise the trend is clear. Also when some entity like supermarket chains or their advocacy groups tried to split up shrinkage by its causes in the past decades, even the shoplifting part fell. So there is no better statistics, and that tells that shoplifting is probably falling.

Of course, you cannot know, but statistics is quite clear that shoplifting decrease is way more probable than increase, and you need some other reasons to advocate for increasing shoplifting. So when somebody does that, it’s highly probable that not because shoplifting is actually increasing.

Okay, then how could anyone possibly know theft is going up?

Wouldn't insurance rates go up if they reported all of the shoplifting? I suspect most large company's do some sort of self insurance setup though.

As part of lobbying for changes to laws, or for more police funding - stores accurately track "shrinkage", why are you so certain it's not being reported?