It doesn’t shrink, it just changes shape. The volume of the material remains the same after “shrinking”. It’s just a bit thicker.
If you put a water drop on a waxed surface, the drop forms a bead. If you try to spread out that bead and freeze it, you get a flat sheet of ice. If you melt it again, the molecules’ mutual attraction causes the sheet of ice to contract from the edges to form a bead of liquid water again, because this is the lowest energy state with the lowest internal stresses. The same principle applies to plastic – when you heat it, it “relaxes” into a more stable shape, typically conforming to whatever it’s wrapped around as it contracts and gets thicker.
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