This Retailer Is the Latest to Remove a Major Feature From Its Stores Due to Rising Theft Five Below CEO Joel Anderson addressed the company's plans to combat theft in an earnings call earlier this week.
By Emily Rella
Key Takeaways
- Discount retailer Five Below will be limiting self-checkout in its 20,000 stores due to mounting theft in high-risk locations.
- CEO Joel Anderson told investors that he hopes to have 75% of transactions across the chain made with the help of an associate.
- The company is also taking other preventative theft measures like hiring store guards and checking receipts upon exit.
Following the path of other retail chains like Target that are trying to combat rising theft in stores, discount chain Five Below has decided to scale back on self-checkout stations, opting for cashier-only options in over 1,500 locations.
In a Q4 2023 earnings call on Wednesday, CEO Joel Anderson told investors that the "most significant" change the company made during the quarter was to limit self-checkout registers and put a store associate up near the front of the store.
Anderson said that the decision to limit self-checkout was in direct correlation with crime inside certain store locations and that additionally, the stationed personnel helped make the shopping experience more seamless for those entering the store.
Related: Target Doubles Down on Traditional Checkout Lanes
"What we do know is that in higher crime rate index stores, the shrink is higher than lower crime index stores," he told investors. (Shrink in retail refers to a discrepancy between what a store's inventory list shows versus the number of products actually in stock.)
He further explained, "And we know that our self-checkout stores are higher than non self-checkout stores. So, the opportunity really rests immediately in tightening up our policies and how we operate in our … high crime index self-checkout stores."
Anderson said that the company hopes to have 75% of transactions across the chain made with the help of an associate with a goal of having 100% made with the help of an associate in the highest-shrink, highest-risk store locations.
Other security measures that the company plans to implement against theft include checking receipts as customers exit the stores and putting guards around the stores.
"We intend to measure progress as soon as Q2 when we perform a limited number of store counts," he said. "While we are confident these measures will help us over time … we have not included any financial impact for shrink reduction in our 2024 guidance. Lastly, at Five Below, we always play offense and intend to aggressively pursue returning to pre-pandemic levels of shrink, or offsetting the impact over the next few years."
Related: Why Costco's Avoided Major Retail Theft Unlike Target, Walmart
The chain joins fellow discount retailer Dollar General which announced earlier this month that it would be removing self-checkout from 300 high-risk stores and offering associate-assisted checkout to 9,000 more stores.
Five Below currently has around 20,000 stores across the country.
The retailer was down just over 13% year over year as of Friday afternoon.
