What a difference two years make: Dollar General was enthusiastic enough about self-checkout in June 2022 that it announced trialing 100% self-checkout at 200 stores. Now, the discount retailer has removed self-checkout from approximately 12,000 stores since the beginning of 2024, including 3,000 in May alone, citing shrink as the primary reason for the change.
“Shrink continues to be the most significant headwind in our business, and we are deploying an end-to-end approach to shrink reduction across the organization, including efforts in our supply chain, merchandising and within our stores,” said Todd Vasos, CEO of Dollar General during a an earnings call last month.
Dollar General will continue to offer self-checkout in a “limited number of stores, most of which are higher volume and low-shrink locations,” added Vasos, who was brought back as CEO in October 2023 after an initial seven-year stint in the job. He had identified a “significant headwind from inventory shrink” in a December 2023 discussion of Dollar General’s results.
The retailer is focused on improving the store experience, where “everything begins and ends for our customers,” said Vasos during the May 2024 call. Dollar General has “prioritized increasing the employee presence at the front end of our stores to provide a friendly, welcome and elevated level of engagement to our customers, while also facilitating a positive checkout experience,” he noted. “We have additionally focused more of our labor hours on perpetual inventory management in our stores by adding specific inventory management shifts and specialized inventory training in each store.”
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Dollar General also is focusing on reducing turnover among managers, in part with improvements to supply chain and merchandising functions. “While we still have work to do, we are seeing year-over-year reductions in turnover at all levels within our retail operations, including regional director, district manager, store manager, assistant store manager and sales associate,” said Vasos. “We are proud of this progress and excited to see our actions resonating with our team in the field.”
For its Q1 2024, which ended May 3, 2024, Dollar General’s net sales reached $9.9 billion, a 6.1% increase compared to the same period the previous year, primarily driven by positive sales contributions from new stores and increases in same-store sales, which climbed 2.4% compared to Q1 2023.
