Dollar General drops self-checkout to reduce theft

Dollar General is pulling back on self-checkout as it tries to curtail retail theft across its stores. 

The company will remove self-checkout registers from 300 stores that have the biggest issue with shrink – an industry term referring to lost or stolen merchandise – during the first half of the year, CEO Todd Vasos told analysts on a Thursday earnings call. 

Currently, the company has self-checkout options available in more than 14,000 stores. However, it is deploying three initiatives to change its self-checkout strategy this year as it tries to reduce the ongoing headwind.

In its most recent quarter, the company reported that “year-over-year shrink headwinds continued to build during the year, increasing more than 100 basis points for both the fourth quarter and full year,” CFO Kelly Dilts said during the earnings call.

In its latest quarter, gross profit as a percentage of sales fell 29.5%, a decrease of 138 basis points, which Dilts said was driven in large part by shrink. 

To help, the company has already started converting self-checkout registers to assisted-checkout options in approximately 9,000 stores.

“This is 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 time,” Vasos said. 

The company is also limiting self-checkout to transactions consisting of five items or fewer.

Vasos said the company believes “these actions have the potential to have a material and positive impact on shrink” in the second half of the year and into 2025.