The self-checkout reckoning has arrived, and more and more stores are cutting down on these contentious kiosks. Dollar General is no different—and during an earnings call late last year, CEO Todd Vasos went so far as to say that the retailer had "relied too much" on self-checkout. In response, the company didn't do away with the self-service option, instead adding additional employees to the checkout area to prevent theft and monitor the store's front end. Now, however, it appears that the dollar store's strategy has shifted once again.
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During a March 14 earnings call with investors, Vasos revealed that Dollar General has taken a "fresh look" at store operations and is working to "enhance the overall customer and associate experience" in stores. To do so, the CEO said the discount store is making changes to self-checkout at all 14,000 Dollar General locations where the option is available.
In total, 300 stores will say goodbye to the self-service option completely, Vasos revealed. These stores have the "highest shrink," a term used in retail to define loss, whether from theft (by employees or shoppers), damaged items, or fraud, among other factors. The company did not share the location of the affected stores.
At 9,000 additional Dollar Generals, the retailer has already started converting self-service registers to assisted-checkout lanes. According to Vasos, Dollar General is able to do this thanks to a product that was installed with the self-checkout machines, which "is convertible from self-checkout to associate-assisted checkout."
These two changes are "intended to drive traffic first to our staffed registers, with assisted-checkout options available as second or third options to reduce lines during high-volume times," Vasos told investors.
As for the remaining 4,700 stores or so, the CEO said Dollar General is now limiting self-checkout to those with five items or less.
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Overall, Vasos said, "These steps are in line with where the customer wants us to be, which includes increasing personal engagement with them at the store."
"Additionally, we believe these actions have the potential to have a material and positive impact on shrink as we move into the back half of the year and into 2025," he concluded.
Dollar General decided to limit self-checkout after reviewing data from an artificial intelligence (AI) solution called Everseen that looked into hundreds of thousands of self-checkout transactions.
"We were able to see through AI what has transpired over the course of many months of transaction data at self-checkout," Vasos said on the call.
The data revealed "true shrink," which includes purposeful theft, as well as "inadvertent shrink," which can be chalked up to items that were misscanned or weren't scanned properly, he said.
While some shrinkage is inevitable, Vasos said the immediate shift to assisted-checkout is expected to "immediately do a lot" for Dollar General's shrink. In addition, putting more employees at the front end of the store and exerting more inventory control is also being implemented to keep theft and other related concerns under control.
In response to a request for comment, a spokesperson for Dollar General directed Best Life to the March 14 earnings call transcript.
