In tough economic times, people steal more.
Of course, some people shoplift because they see it as an opportunity to get something for free. Also, some people steal because they cannot afford the basic necessities they need, while others just take what they want.
It’s a serious problem for retailers after thefts spiked in the year the economy reopened after coronavirus-era lockdowns.
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“Shrink losses as a percentage of total retail sales in 2022 were $112.1 billion, up from $93.9 billion in 2021.” (2023 National Retail Safety Survey) – Get your free report.
Shrinking isn’t just about shoplifting. It also takes into account internal (employee) theft and loss due to reasons other than theft. But shoppers stealing from stores has become a problem for retailers like Walmart and Target. (target) – Get your free reportaccording to CEO et al.
In some ways, these retailers may have themselves to blame. The increase in theft is due, at least in part, to increased use of self-checkout. When identity verification is required, some people may accidentally miss an item or think they scanned it when they didn’t, while others may abuse the system and steal intentionally.
This is a problem that can be solved with technology or old-fashioned solutions.dollar general (DG) – Get your free reportlike some Target and Walmart stores, is opting for a people-driven solution.
Dollar General eliminates self-checkout
Dollar General has a people-focused model in its stores. In order to keep prices down, the chain has very few people working in its stores, as labor costs increase, overhead costs increase, and prices rise.
To compensate for limited staffing, Dollar General has introduced self-checkout. This led to an increase in thefts at the chain’s more than 17,000 stores in the United States.
CEO Todd Vasos, who recently took back the chain’s CEO job from Jeff Owen, has decided to scale back the chain’s self-checkout efforts.
“We plan to increase the presence of employees at the front end of our stores, particularly in the checkout area. Self-checkout contributes to the convenience proposition for some stores’ customers, but it is not a friendly and “That doesn’t diminish the importance of a friendly cashier; a helpful employee who is there to greet the customer and assist while the checkout process takes place,” he said during the company’s third-quarter earnings call. said.
This is a big change for Dollar General
Those comments come just three months after Owen boasted about the chain’s introduction of self-checkout.
“We simplified our operations by optimizing container shipping and rolling out a self-checkout option available at approximately 14,000 stores as of the end of the second quarter,” he said during the company’s second-quarter earnings call.
Mr. Vasos, who served as CEO for seven years before retiring in 2022, said those efforts were a mistake. Dollar General plans to spend an additional $150 million on stores to fix the problem.
“Reallocating funds from our smart teams directly into our stores and reaching customers immediately every day is critical, and that’s exactly what we’re trying to do,” he said.
Vasos believes the changes will help the company reduce theft.
“And when we do that, and I think it’s really important to point out, it also helps the front end of that store. It also helps you have someone to meet and greet customers and make phone calls. “It also helps the sales line because there’s always someone on the front end of the store monitoring the front end of the store,” he said.
Dollar General brought back Bathos in 2023, in part because its stock price fell nearly 50%, but it has no plans to completely eliminate self-checkout.
“We have always relied on self-checkout in our stores, and we have started to rely on it too much this year. “We should,” he added.