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Following in the footsteps of other retail chains like Target that are trying to combat rising levels of in-store theft, discount chain Five Below has decided to scale back its self-checkout fleet in favor of checkout-only options at more than 1,500 stores. did.
Chief Executive Officer Joel Anderson told investors on Wednesday’s fourth-quarter 2023 earnings call that the “most significant” changes the company made in the quarter were limiting self-checkout and placing clerks closer to the front of stores. He said it was to place the
Anderson said the decision to limit self-checkout has a direct correlation to crime within certain stores, and added that staffing will make the shopping experience smoother for people entering the store.
Related: Traditional checkout lanes double your targets
“What we know is that stores with high crime rates have higher shrinkage rates than stores with lower crime rates,” he told investors. (In retail, shrinkage refers to the difference between what is displayed on a store’s inventory list and the number of items actually in stock.)
He added, “And we know that our self-checkout stores are more expensive than non-self-checkout stores. So this opportunity is to strengthen our policies and how we operate at our self-checkout stores, which have a high crime index. It’s happening right away,” he explained. ”
Anderson said the company wants to engage employees in 75% of transactions chain-wide, with a goal of 100% employee engagement in its most shrinking and high-risk stores. He said that
Other safety measures the company plans to implement against theft include checking customers’ receipts when they leave the store and placing security guards around the store.
“We intend to conduct a limited number of store counts in the second quarter and measure progress as soon as possible,” he said. “While we are confident these measures will help over time, our 2024 guidance does not include the financial impact of shrink reduction.Finally, at Five Below, we remain aggressive. , we intend to aggressively pursue a return to pre-pandemic levels,” reducing or offsetting the impact in the coming years. ”
Related article: Why Costco avoided grand theft at its retail stores, unlike Target and Walmart
The chain joined fellow discount retailer Dollar General in announcing earlier this month that it would eliminate self-checkout from 300 high-risk stores and offer associate-assisted checkout to an additional 9,000 stores.
Five Below currently has approximately 20,000 stores nationwide.
As of Friday afternoon, the company’s sales were down more than 13% from a year ago.
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