Dollar General is taking new steps to address widespread theft, which has become a significant issue for the company.
The retailer plans to remove frequently stolen items from its shelves and discontinue self-checkout options in thousands more stores.
Dollar General Removes Commonly Stolen Items
Dollar General is removing certain products from its stores to combat theft losses. The U.S. Sun revealed that the discount chain has not specified which items will be removed but confirmed they are the most commonly stolen products.
Retail theft remains a significant challenge for Dollar General, impacting its overall performance. The company is implementing a comprehensive approach to reduce shrinkage, focusing on its supply chain, merchandising, and store operations.
In retail, "shrink" refers to stolen or lost goods.
Moreover, the discount chain is taking steps to tackle the issue of lost or stolen merchandise, commonly known as shrink. According to CEO Todd Vasos during an earnings call, this problem remains a significant challenge for the company, as Fox Business News noted.
The company is implementing a comprehensive strategy to reduce shrinkage across all areas of its operations, including supply chain, product selection, and in-store practices.
According to Vasos, Dollar General plans to reduce its inventory by up to 1,000 items within its supply chain by the end of the year.
Also Read: Family Dollar Announces Permanent Closure in Four Days, 75% Off Sale to Follow
Dollar General Eliminates Self-Checkout Lanes to Combat Theft
During a May 30 earnings call with investors, Vasos revealed the company's efforts to reduce shrink. He highlighted that shrink remains a significant challenge for the business.
In addition to removing selected items, the Best Life website emphasized that Dollar General is eliminating self-checkout lanes from many stores to combat shoplifting. The retailer initially converted around 9,000 locations to cashier checkouts during the quarter.
Building on this, the company removed self-checkouts from an additional 3,000 stores in May, bringing the total to approximately 12,000 stores without self-checkout lanes this year.
Vasos emphasized that while this represents a significant change, it is seen as the right move to enhance customer engagement and better position the company to reduce shrink in the latter half of 2024, with more substantial improvements expected in 2025.
Moving forward, self-checkout options will be available in many higher-volume, low-shrink locations.
Furthermore, Dollar General's supply chain teams are working to ensure timely deliveries, while the company's merchants are reducing inventory, according to Vasoss.
Dollar General plans to remove frequently stolen items, known as "high shrink" items in stores.
For the three months ending March 31, the company's gross profit as a percentage of sales dropped to 30.2%, a decrease of 145 basis points. This decline was mainly due to increased shrinkage, markdowns, a higher mix of consumable sales, and lower inventory markups.
Dollar General Expands Amid Competitor Closures
Meanwhile, Dollar General is set to expand its nationwide store presence. The company plans to build 730 new stores this year and 70 more in 2025. In addition, 1,620 existing locations are being renovated across the country.
While Dollar General is growing, some of its competitors are closing stores. Family Dollar is shutting down 1,000 stores nationwide due to what CEO Rick Dreiling described as a "very challenging macro environment." These closures are targeting underperforming locations.
Additionally, Dollar Tree has acquired 170 stores from the 99 Cents Only chain, which faced bankruptcy.
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