Big-box retailers are rethinking their self-checkout strategies. Here's why

CTV National News: Rethinking the self-checkout Allison Bamford reports on how experts are raising the alarm over how self-checkout systems contribute to a rise in retail theft.

Some grocers are reconsidering their self-checkout strategy to find a balance between meeting their customers' demands and mitigating losses from theft.

Self-checkouts jumped in popularity over the pandemic when social distancing orders were in place, especially with younger shoppers, a study by Dalhousie University's Agri-Food Analytics Lab suggests.

Retail chains' adoption of these systems has provided customers with the option to scan and bag purchased items to reduce checkout times and cater to customers with fewer items.

One expert says theft concerns are one reason why some retailers have been cautious about adopting or expanding self-checkouts and that the key would be to incentivize customers when using self-checkouts.

"Many feel they are doing someone else's work with no compensation. Grocers need to think about how to strike the right balance between convenience and experiential compromises," said the director of Agri-Food Analytics Lab, Sylvain Charlebois, in an email to CTVNews.ca.

"I don't think self-checkouts are dead, or will be removed entirely. Younger generations tend to appreciate them and will use them more often. But grocers do recognize that their store exit experience is [a] work in progress. Many models are being explored," he said.

Retail Council of Canada spokesperson Michelle Wasylyshen also cited theft as a major issue retailers are facing.

"Theft is often thought of as a victimless crime, but it's not. It costs Canadian retailers billions of dollars a year, costs that are passed on to all consumers when they go shopping," she said.

She says as consumers and retail evolve, so will self-checkouts.

"In some stores, we are seeing more self-checkout stations, and in others, we are seeing a different mix," said Wasylyshen.

In July, the Retail Council of Canada reported retail thefts increased by 300 per cent in B.C., pointing to Canadians' efforts to survive in the current state of the economy and basic products increasing to unaffordable prices.

According to Wasylyshen, shoplifting has increased across all categories including food, apparel and footwear merchandise. Wasylyshen says escalating inflation, a growing re-sale market for stolen goods and an increase of organized crime are some of the contributors.

University of Leicester emeritus professor Adrian Beck, who has studied self-checkout systems for more than a decade, said some grocers are reporting 25 per cent of their losses may be due to self-checkouts.

In an email to CTVNews.ca, Beck said it's important to also note that they also have made significant labour savings, simultaneously.

In a 2022 industry report conducted by Beck, 93 retailers across the globe estimated about 23 per cent of their store losses were due to a combination of theft and customer error at self-checkout.

“Most big retailers are unlikely to peddle back from their current self-checkout position, but they are investing much more heavily in trying to better manage the losses," said Beck.

“There is much more recognition now that they have to get the labour resource at the right level to ensure customers are kept accurate and honest when using self-checkout," added Beck.

Beck said Walmart in the U.S. withdrew from mobile 'scan-and-go' in 2018, stating more explicitly that it was because of "unacceptable losses."

Meanwhile, Target is testing a new self-checkout policy that requires customers to use self-checkout if buying 10 items or less, as reported by CNN, and customers buying more are required to use full-service lanes with cashiers.

London Drugs, a retail pharmacy chain with locations in Western Canada, confirmed that self-checkouts will not be removed but says instead, it is adding them to select locations where consumers show a demand.

Self-checkouts will be added "in downtown stores where there is a large surge in traffic, or around transit hubs where consumers are grabbing only one or two items and want to get in and out quickly," said the company's president Clint Mahlman in an email to CTVNews.ca.

Walmart Canada confirmed self-checkouts are still available at all stores. In a emailed statement, the company said it evaluates the needs of every store and its customers on a case-by-case basis to determine the mix of cashier checkouts and self-checkouts.

Metro declined to comment. Sobeys, Best Buy Canada, and Loblaws Companies Ltd. did not immediately respond to a request for comment.

In June, Loblaw-owned stores, including Loblaws, Real Canadian Superstore, Shoppers Drug Mart, Your Independent Grocer, Zehrs and No Frills, started asking customers for their receipts before leaving the store.

The receipt check for some stores across Canada prompted backlash from customers.

In a Leger poll published in August, less than half of Canadians believed retail stores were implementing the right amount of security measures to prevent shoplifting.

Respondents were split on whether they would support measures such as store employees checking receipts when customers exit or eliminating self-checkout machines.

Forty-five per cent of respondents said companies are putting in place the right level, 27 per cent said they are not implementing enough measures, while 10 per cent said stores are doing too much to prevent shoplifting.

With files from The Canadian Press and CTVNews.ca's Natasha O'Neill