Dollar General second-guesses self-checkout with labor spending

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

During a earnings call On Thursday night (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 to some of its more than 19,000 stores to do everything from helping customers check out to deterring shoplifters.

CEO Todd Vasos acknowledged that while self-checkout is convenient for many customers, “it doesn’t diminish the importance of a friendly, helpful employee.”

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

Customers are flocking to Dollar General and similar chains because they are cheap, but the company’s efforts to make a profit on its low prices means 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.” Eemployees and customers alike repeatedly went viral talking about how understaffed stores are, and messy and frustrating to navigate. So frustrating — and unsafe — that the Occupational Safety and Health Administration labeled the company a “serious violator” for acting more than nearly $25 million in proposed fines since 2017. In May, Dollar General’s shareholders voted for a workplace safety audit.

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

The company achieved $276 million in profit for the quarter with $9.7 billion in revenue. Shares fell slightly in Friday trading.