Dollar General had previously relied on self-service checkouts to compensate for a limited number of employees. However, this approach often leads to higher theft rates, both deliberate and unintentional.
Recognizing this issue, major retailers like Target, Walmart, and Walgreens have taken steps to monitor their self-checkout areas closely. Some have even reduced or completely removed these self-service options to curb theft.
General's Staffing Struggles and Store Disarray
Customers often find that Dollar General stores have minimal staffing, with frequently just one person at the register and maybe another on the floor. The self-checkouts caused low staff numbers, often making stores appear disorganized, with shelves not fully stocked and aisles occasionally blocked by boxes.
These staffing challenges at Dollar General have not only led to customer complaints but have also caught the media's attention, including a feature on John Oliver's "Last Week Tonight" in 2023, highlighting the issues of understaffing and disorganized store layouts.
Under CEO Todd Vasos's leadership, Dollar General is strategically shifting its operations. Vasos, in the company's recent third-quarter earnings call, announced plans to bolster staff presence, particularly in the checkout areas of their stores.
This move comes as a response to the challenges posed by self-checkout systems. While these systems offer convenience in some stores, Vasos emphasized the ongoing need for engaging and helpful employees to assist customers during the checkout process.
The decision aims to enhance customer service and improve the overall shopping experience at Dollar General stores.
Removing self-checkout systems is part of the budget-friendly retailer's broader strategy to reduce theft.
Dollar General Reassesses Self-Checkout Strategy
In recent news, Dollar General is revising its approach to self-checkout, joining other retailers in reevaluating the technology. The company, known for its aggressive expansion, had implemented self-checkout systems in nearly half of its 19,000 stores. It included testing new store formats focused solely on self-service checkouts.
Initially, Dollar General and similar retailers believed self-checkout would reduce labor costs and speed up customer checkout. However, the company is now adjusting its strategy to address revenue loss and "shrink" - a retail term encompassing various losses like shoplifting, employee theft, damaged goods, administrative errors, and online fraud.
The shift comes amid a rise in shrinkage across the retail sector, primarily attributed to increased theft. Retailers are calling for stricter criminal penalties in response to this trend.
Yet, it's becoming clear that self-checkout may contribute to these shrinkage problems. These systems often result in more lost revenue than traditional cashier-operated lanes due to intentional theft and honest mistakes customers make.
Shoplifting is a complex issue, with some individuals stealing out of opportunity, while others do it out of necessity for bare essentials, and still others for items they desire. This problem has become more pressing for retailers, especially after the lifting of COVID-era lockdowns, which saw a significant increase in theft incidents.
Retail loss, also known as shrink, rose considerably in 2022. According to the 2023 National Retail Security Survey, shrink accounted for losses of $112.1 billion, a notable increase from $93.9 billion the previous year.
This figure represents a significant percentage of total retail sales, highlighting the growing challenge of theft and loss prevention for major retailers.
Related Article: Major Shift in Amazon Prime Viewing Experience: Introduction of Ads in 2024 Sparks Outrage
