Dollar General second-guesses self-checkout with labor spending

It turns out that stores that want people in the door sometimes need people there to help them.

During an earnings call Thursday evening (Dec. 7), Dollar General told investors that it will spend an extra $50 million on labor by the end of the year, bringing its total 2023 investment to a planned $150 million. That’s code for bringing employees back into some of its 19,000-plus stores to do everything from helping check out customers to deterring shoplifters.

CEO Todd Vasos acknowledged that, while self-checkout is convenient for many customers, “it does not reduce the importance of a friendly, helpful employee.”

“We believe these actions will drive improvements in customer satisfaction, including customer service, on-shelf availability and convenience, as well as sales, while our focus on the front end should also reduce shrink,” he said, using a euphemism for retail theft.

Customers flock to Dollar General and similar chains because they are cheap, but the company’s efforts to make a profit on its low prices means the costs have to be cut somewhere, and sometimes the burden falls on staff. In September, Bloomberg called Dollar General the “worst retail job in America.” Employees and customers alike have repeatedly gone viral talking about how short-staffed stores are, and messy and frustrating to navigate. So frustrating—and unsafe—that the Occupational Safety and Health Administration labeled the company a “severe violator” for racking up more than nearly $25 million in proposed fines since 2017. In May, Dollar General’s shareholders voted for a workplace safety audit.

Workers have started organizing to push for better working conditions. A National Labor Relations Board judge found in July that the company had illegally blocked unionization efforts at a store in Connecticut. Dollar General did not immediately respond to whether its labor investment was related to its labor issues.

The company posted $276 million in profit for the quarter on $9.7 billion in revenue. Shares were down slightly in Friday trading.