Additional Coverage:
- Dollar General CFO says shoplifting problem is ‘well in our control’—after taking this step (fortune.com)
Dollar General’s Anti-Theft Measures Paying Off
Dollar General, a Fortune 500 company, is seeing positive results from its ongoing efforts to combat “shrink,” the retail term for inventory loss due to theft, damage, or errors. CFO Kelly Dilts reported a positive trend in the company’s fight against shrink during a recent earnings call, attributing the success to the company’s “Back-to-Basics” strategy.
Dilts highlighted a year-over-year shrink improvement of 68 basis points in the fourth quarter of 2024, with the positive momentum continuing into the first quarter of 2025. This upbeat assessment marks a significant shift from Dilts’ December 2023 comments, where she acknowledged shrink as a substantial ongoing issue. In the past, shrink had negatively impacted the company’s gross profit margins.
A key component of Dollar General’s strategy has been the removal of self-checkout kiosks in a large number of its stores. After using AI to analyze purchasing patterns, the company identified a correlation between self-checkout and increased levels of theft and mis-scanned items.
This data-driven approach led to the decision to revert to cashier-staffed checkout lanes in approximately 12,000 stores. This decision reversed a previous initiative to expand self-checkout options.
The company’s efforts coincide with a surge in bargain shoppers amidst economic uncertainty. Dollar General reported a 4.5% year-over-year increase in net sales to $10.3 billion for the quarter ending January 31, 2025, and a 1.2% increase in same-store sales, exceeding Wall Street expectations. The company’s stock price also saw a 7% increase, closing at $79.95 following the earnings announcement.