"To pack up shop" means "to prepare to leave". Think about an owner of a shop (i.e. a store) who intends to close his business and move it to a new address. It would be foolish for him to leave his merchandise, cash register, signs, and other business items in the shop he is leaving, so he must "pack up" these items in order to transport them to their new location.

This is ages old, but it seems to be one of the first Google hits, so for other confused people: It means "to end your workday" or "to go home". "When do you pack up shop today?" "I guess I will be done at university at six-ish."