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Dollar General to offer self-checkout in ‘limited’ number of stores

Dollar General operates 19,488 stores in the U.S. and Mexico.
Dollar General will limit self-checkout mostly to higher volume low-shrink locations.

Dollar General is eliminating the self-checkout option in the majority of its stores.

The discounter has converted approximately 12,000 stores away from self-checkout, Dollar General CEO Todd Vasos said during the company’s first-quarter earnings call. Moving forward, it plans to have self-checkout options available in a “limited number” of stores, most of which are higher volume and low-shrink locations. 

“While this represents a significant change in our stores, we believe this is the right course of action to drive increased customer engagement while also better positioning us to begin reducing shrink in the back half of '24 with a more material positive impact expected in 2025,” Vasos told analysts on the call.

The elimination of self-checkout comes as shrink continues to be the most significant headwind in Dollar General’s business, Vasos said. The chain is deploying an “end-to-end approach” to shrink reduction across the organization, including efforts in its supply chain, merchandising and stores.

“To help combat issues around shrink, our supply chain teams are primarily focused on ensuring deliveries are on time and in full and our merchants on reducing the amount of inventory we carry,” Vasos said. 

Within stores, the retailer is focusing on delivering a more consistent front-end presence and removing high shrink SKUs in addition to the move away from self-checkout.

Dollar General’s shrink reduction plans also include a focus on reducing store manager turnover.

“We continue to focus on reducing store manager turnover, which is correlated to sales and shrink results in our stores,” Vasos said on the call. “Notably, 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.

Dollar General reported better-than-expected profit, sales and same-store sales for its first-quarter as more customers shopped its stores for groceries and other essentials.

Net income fell to $363.3 million, or $1.65 a share, for the quarter ended May 3, from $514.4 million, or $2.34 a share, in the year-ago period. Analysts had expected earnings per share of $1.58. 

Net sales rose 6.1% to $9.91 billion, topping estimates of $9.89 billion. 

Same-store sales increased 2.4%, also more than expected, driven by an increase in customer traffic, partially offset by a decrease in average transaction amount. Growth in the consumables category was partially offset by declines in the home products, seasonal and apparel categories.

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