In 2020, Walmart started testing cashierless, all self-checkout big box stores, first in the United States and then in Canada.
But the pilot project didn’t quite catch on. Walmart tells CBC News that, currently, there’s just one such location across Canada and the U.S. — in Sainte-Agathe-des-monts, a small town in Quebec.
Meanwhile, over the past eight months, the retail giant has removed all its self-checkout machines at six U.S. locations, joining several other big box chains that have ditched the machines in certain stores, including, recently, a Giant Tiger in Stratford, Ont.
It’s a surprising shift in the predicted trajectory — instead of the all-self-checkout store becoming the norm, some retail outlets are returning to the traditional, all-cashier format.
“Stores anticipated that this technology would allow them to significantly reduce labour costs,” said Christopher Andrews, a sociologist and author of The Overworked Consumer: Self-Checkouts, Supermarkets, and the Do-It-Yourself Economy.
But instead of cutting costs, some stores discovered that self-checkout actually hurt their bottom line, largely due to theft, says Andrews.
“I think they’re just losing so much [money] that it just becomes an economic liability.”
Machines need attendants
Two weeks ago, franchise owner Scott Savage removed the four self-checkout machines at his Giant Tiger discount store in Stratford, some 90 kilometres west of Hamilton.
He says, rather than theft, he made the change because many of his customers are seniors who dislike using the machines.
“The biggest complaint you have from everybody is, ‘You don’t pay me to work here,'” said Savage. “They would line up at my regular registers, and they would just prefer that service.”
At least six Canadian Tire locations in Ontario have also scrapped self-checkout. Two of the stores’ franchise owners, one in North Bay and one in Toronto, told CBC News they made the move because they felt it improved customer service.
But Andrews says, along with theft, staffing requirements are often the main reasons why retailers abandon self-checkout. The machines require attendants to help customers — while also watching for thieves.
“What they found was that actually they couldn’t eliminate a lot of the cashiers, because they needed the cashiers there, in part, to deter shoplifting,” said Andrews, an associate professor at Drew University in Madison, N.J.
Self-checkout theft is a growing problem for many Canadian stores, and some have started checking shoppers’ receipts to try and prevent it — despite backlash from customers.
Several studies have suggested that self-checkout theft is a problem, but there’s no hard data as retailers don’t make such information public.
The Retail Council of Canada says, in speaking with its members, it has assessed that self-checkout theft is on the rise.
“People love the self checkout, but at the same time, if there is no control, we’ve seen that theft has grown,” said the council’s CEO, Diane Brisebois.
She says she’s told some of the culprits are organized gangs of thieves who neglect to scan pricey items.
“It could very well be three very expensive bottles of face cream, it can be specialized baby formula,” Brisebois said. “They target merchandise that they know has high value on the street.”
‘Shrinkage’ costs money
Earlier this month, CBC News asked Walmart if theft was a factor in ditching self-checkout from certain stores. A spokesperson said the chain considers “several factors.”
But in an interview with ABC’s Good Morning America last week, Walmart’s CEO admitted that the retailer removed the machines from locations with the highest rates of disappearing merchandise (known as “shrink” in the industry).
“There are a few stores where we’ve made the decision that they’ll come out of,” said Doug McMillon. “We want to make sure that the checkout process is accurate. Retail shrinkage is a cost. So enabling us to lower that cost, we can keep prices down.”
Major U.S. dollar store retailers, Dollar Tree and Five Below, also recently announced they were eliminating self-checkout in stores with the highest rates of disappearing merchandise.
“Although adoption rates for self-checkout have been high, we believe there is truly no substitute for an employee presence,” said Dollar Tree’s CEO Todd Vasos during an earnings call in March.
He said the retailer was removing the machines in 300 stores and scaling them back in thousands of others.
“We believe these actions have the potential to have a material and positive impact on shrink,” said Vasos.
Back at Giant Tiger in Stratford, several customers told CBC News they were happy the store no longer has self-checkout.
“I like the person-to-person contact,” said Leslie Clayton-Winget. “You can’t say to a machine, ‘Have a good day.'”
Another customer said she fears the technology will eliminate jobs. “I’d rather see the people stay employed than [me] doing self-checkout,” said Angela Weber.
So what does the future hold for self-checkout? Andrews predicts retailers will continue to search for solutions that will help them iron out the kinks.
But he warns that any new strategy could also have drawbacks.
“I think we’ll continue to see them experiment,” he said. “But I think we’ll also continue to see these sort of unanticipated consequences.”