Why you should not include Stakeholders in the Sprint Retrospective

Let’s first understand what is a Sprint Retrospective. Sprint Retrospective is one of the agile ceremonies that is conducted on the last day of the sprint and is focused on examining the performance and improvement areas more at a process level. If you are following sprints of longer duration say of a month, try to split the sprint retrospective into two and have a checkpoint after two weeks. This is recommended to not let any improvement area wait for a long time.
The process includes everything that has an effect on the working of the scrum team. This includes open discussions with touch points related to practices, team behavior, collaboration, availability, organization disruptions, external threats, tools, etc. 
To recap, a scrum team consists of a product owner (PO), a scrum master and the development team. Scrum teams are self-organizing and cross-functional teams who choose how best to accomplish their work. This team works towards setting the sprint goal and delivering it.

As a best and highly recommended practice, only the scrum team should be part of the sprint retrospective

Any internal or external stakeholders should not be part of the sprint retrospective.
Why?

Because the sprint retrospective is focused on people, relationships, tools and environment. With the involvement of the stakeholders, teams don’t open up in front of them and hesitate to provide any actionable feedback concerning the scrum team. The most common outputs seen in the sprint retrospective with stakeholder involvement are very general like, ‘the sprint was good’, ‘team was supportive’, etc. which is good but does not add any constructive value to the purpose of this event. Teams find it more comfortable to share their honest opinions in the absence of the stakeholders simply because of the trust factor within the scrum team which is key to Agile. Also, remember that Scrum teams are self-organizing and cross-functional who choose how best to accomplish their work, rather than directed by others outside the team. 
Would you want to flag your team’s shortcomings in front of the internal or external stakeholders? If no, follow the best practice of doing sprint retrospectives within a scrum team only.