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Self serve or help yourself?

Self checkouts might not be the cost-cutting cure they're touted to be

The humble carrot has long been synonymous with better vision, but it has become something of a blind spot for those grocery retailers becoming increasingly reliant on self-serve checkouts.

Alongside other low-cost items such as onions and bananas, the root vegetable has become a cost-effective “substitute” for more expensive items
such as grapes and cherries at self-checkout stations around the world.

•In 2012, a supermarket chain in Australia found that it had somehow sold more carrots than it had in stock. Upon further investigation, it discovered more than 1,000 self-checkout transactions involving more than three 1-kg bags of pre-packed carrots in a single week;

•A U.K. store, meanwhile, reported one instance of a single shopper scanning 18 bags of carrots and nothing else;

•“Everything is carrots,” quipped one commentator on a Reddit thread asking if anyone had ever stolen from a self-serve checkout, and how they did it.

Also known as “the banana trick,” substituting a lesser-priced item is among several tactics that otherwise law-abiding citizens use to save a few bucks at the self-serve checkout.

Not scanning an item before placing it into a bag is known as “the pass around,” while “the switcheroo” requires placing the scan sticker of a lower-priced item over the actual price sticker.

A study by criminologist Emmeline Taylor even came up with a catchy acronym for these opportunistic grocery thieves: SWIPERS (Seemingly Well-Intentioned Patrons Engaging in Routine Shoplifting).

First introduced in the U.S. in 1992, self checkouts are part of a growing wave of automation sweeping through the retail industry as it looks to mitigate rising labour costs and remain competitive with online giants like Amazon.

According to a recent study from Atlanta, Ga.-based NCR Corporation, the global installed base of self-checkout machines will reach 325,000 by 2019, up from 191,000 in 2013.

Late last year, Walmart Canada introduced a new scan-and-go system that enables customers to scan their items and tally their bill while shopping. Metro currently has self-checkout terminals in 24 Ontario stores, and has announced its intention to add them in seven more stores before the end of summer. The Montreal-based retailer also plans to add a self-checkout option at six stores in its discount banner, Food Basics.

READ: Metro looking at automation to help offset Ontario minimum wage increase

Loblaw Companies Ltd., which has estimated that minimum wage increases in Ontario and Alberta could add up to $190 million in labour costs across its operations this year, also continues to introduce self-serve checkouts at both Loblaws and Shoppers Drug Mart locations (neither Metro or Loblaw responded to interview requests).

READ: Shoppers Drug Mart giving self-checkouts a new voice

Meanwhile, other regional chains such as Farm Boy have thus far resisted the shift towards automation on principle. “We want to say thank you for spending money in our store. It’s the last point of contact. You spend all this money and now you’ve got to check yourself out?” says Jeff York, co-CEO for the chain, which operates 25 stores across Ontario.

Indeed, some experts contend self-service technologies (SST) aren’t the cure, necessarily, for what ails retailers. In a 2017 essay entitled “The Economics of Self-Service Checkouts,” Australian academics Gary Mortimer and Paula Dootson wrote there are no clear signs that self-serve checkouts represent an “easy win” for retailers.

The authors argued that self checkouts aren’t necessarily faster, don’t translate to lower staff numbers, and carry numerous indirect costs—including customer resistance, anger when the system doesn’t work as it should (when it doesn’t recognize a particular item, for instance) and the fact they are not designed to handle a full grocery shop.

Theft, also known as “external shrinkage” in industry parlance, is also an unavoidable by-product. One study of 12 million self checkouts across eight retailers in the United States, Britain and the Netherlands found that about 850,000 of approximately six million items checked —a shrinkage rate of 3.97%—were never actually scanned by customers.

And in a survey of 2,634 shoppers by U.K. digital couponing company Voucher Codes Pro, nearly 20% admitted to stealing something at a self-serve checkout.

Retailers aren’t saying what percentage of shrinkage comes from self-serve checkouts, but one independent grocer in Ontario told Canadian Grocer that he has heard anecdotally that shrink is a “big problem.”

Part of the issue, explained Mortimer in an e-mail interview, is that customers are more easily able to rationalize theft from a faceless corporate entity. “When people deviate from a social norm, they often rationalize and justify the behaviour ‘It’s a victimless crime,’ ‘No one got hurt,’ or ‘It’s a big company, they can afford it,’” he said.

Mortimer said customers might also regard theft as the price retailers have to pay for making customers do everything themselves. “ ‘If I have to select my goods, ring them up and bag them, they’re going to have to compensate me for my time,’” said Mortimer.

In a separate e-mail, Dootson was asked if perceived wrongdoing, such as being involved in a decades-long bread price-fixing scheme, would make it easier for thieves to justify stealing from grocers at the checkout. Her response: “So much yes.”

Looks like it’s going to be another bumper year for carrots.

This article appeared in Canadian Grocer's March/April 2018 issue.

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