Dollar General says it relied too much on self-checkout and will hire more staff

• Retail's self-checkout reckoning has arrived for Dollar General.
• The discount store said Thursday it would beef up staffing, aiming to boost sales and reduce theft.
• CEO Todd Vasos said the company "started to rely too much this year on self-checkout in our stores."

Add Dollar General to the list of retailers rethinking their self-checkout strategies as they head into the new year.

The discount retailer said Thursday it will beef up staffing in its stores' checkout areas after the company reported slowing sales growth and rising rates of missing inventory, or shrink.

"While self-checkout has contributed to the convenient proposition for our customers in certain stores, it does not reduce the importance of a friendly, helpful employee who is there to greet customers and assist while the checkout process is happening," Dollar General CEO Todd Vasos said on the company's quarterly earnings call.

Vasos said Dollar General is budgeting $150 million in additional labor hours, as well as reallocating $50 million from the "smart teams" unit to cover the added staffing expenses. Dollar General implemented "smart teams" as a roving crew of workers who would visit stores to help manage inventory.

"It helps on the sales line because we've got somebody to meet, greet, and ring up the customer. It also helps on the shrink line because you've got somebody at the front-end of the store that is always there," Vasos said. 

"We started to rely too much this year on self-checkout in our stores," he added. "We should be using self-checkout as a secondary checkout vehicle, not a primary."

Dollar General's same-store sales fell 1.3% in the most recent quarter, and the company said an increase in shrink ate into profit margins.

A recent analysis found shoppers were 21 times more likely to incompletely ring up their orders at self-checkout than they were with a staffed checkout lane — a phenomenon described as "partial shrink."

And nearly one in seven shoppers admitted to having purposely stolen items at self-checkout, with nearly half of those saying they would do it again, per LendingTree.

Other retailers including Costco and Walmart have made some changes to self-checkout this year.

Costco started asking staff to check shoppers' membership cards in the self-checkout lanes, and assist with scanning items.

Walmart said in September it was pulling self-checkout from at least three stores in New Mexico, and replacing the lanes with traditional staffed registers.

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