Dollar General has halted self-checkout operations at approximately 12,000 stores since early 2024, primarily due to "shrink"—a term used in retail to describe inventory loss through theft, damage, or errors. CEO Todd Vasos, who resumed his role in October 2023, cited shrink as the business's most significant challenge. The company’s end-to-end shrink reduction strategy encompasses improvements in the supply chain, merchandising, and enhancing in-store operations.
Despite the rising popularity of self-checkout during the pandemic for its contactless convenience and labor efficiency, Dollar General identified that these systems often led to increased merchandise losses. These ranged from unintentional scanning errors to deliberate shoplifting, monitored via AI systems. As a result, the company decided to revert to assisted checkouts, which is expected to enhance customer engagement and overall store experience.
In a May 2024 earnings call, Vasos elaborated that the company began by removing self-checkout from 300 stores with the highest loss rates, expanding the initiative to another 3,000 locations in May alone. This strategic rollback aims to have a noticeable positive impact on shrink reduction efforts by late 2024 and, more significantly, in 2025.
Dollar General has maintained self-checkout options in a few high-volume, low-shrink locations. However, most changes include converting self-checkout kiosks to employee-operated stations and increasing manpower presence at store fronts. This move aligns with the company’s goal of ensuring a friendly and engaging customer experience.
The actions are part of a comprehensive plan to navigate the challenging retail landscape marked by shrink. Dollar General has also been optimizing its inventory management by implementing dedicated shifts and specialized staff training, aiming for better stock control. This approach has resonated well on the ground, evidenced by reduced turnover rates among retail operations staff compared to previous years.
Dollar General’s shift from self-checkout follows a broader trend among major retailers. For example, Walmart and Target have also been reconsidering the value of self-checkouts, with both companies implementing restrictions and making operational changes to curb shrink.
This strategic pivot by Dollar General represents a shift in the retail industry’s approach to balancing automation with loss prevention, prioritizing customer interaction and efficient management over the cost-saving appeal of self-service technologies. With these changes, Dollar General aims to strengthen its position against the ongoing challenge of shrinking while enhancing the overall shopping experience for its customers.
