Dollar General makes a major change; Walmart, Target won't follow

It has not been a great year for Dollar General. The chain was lambasted in an episode of "Last Week Tonight" where John Oliver highlighted the many problems in its stores which include significant labor issues.  

The HBO show, cast a harsh light on how poorly staffed the chain's nearly 19,000 stores are. It shows piled up inventory, messy shelves, and workers who begged for more support from corporate.

Related: Popular clothing retailer shuts down all its stores unexpectedly

Oliver was specifically harsh to the company's CEO who retook the top job after his replacement Jeff Owen, delivered poor results, In a 2020 interview, Vasos had explained that the chain does "very good" during good times, but "fabulous" in tougher times.

“Right, it’s a store that tends to do better when its customers are doing worse, which isn’t something that really requires use of the word fabulous,” Oliver said. “Fabulous is best used to describe a quirky hat, or the cast of the Golden Bachelor, or the fact that Kim Cattrall made a million dollars to sit in the back of a car and not talk to Sarah Jessica Parker. But a company bragging about how it can profit off financial hardship? Not so much.”

Oliver is, of course, a comedian, but the company has had multiple investigations by the U.S. Department of Labor through its Occupational Safety and Health Administration (OSHA). 

"After more than 200 failed inspections, Dollar General cannot claim that they misunderstand federal safety requirements. At this point, we can only conclude that they choose to continue exposing their employees to hazardous conditions," said OSHA Area Director Danelle Jindra in Tampa, Florida. "Dollar General must make changes to correct these recurring violations before a worker is needlessly injured or worse."

Dollar General pledges to get better

While Dollar General has not addressed Oliver directly, it has taken a number of steps to improve its image. That has included adding fresh food and produce in thousands of stores — a giant thing because many of its customers have no access to those things. 

Vasos has, in his short time back in charge, pledged to make major changes at the store level. He talked about that during his company's fourth-quarter earnings call.

"We've taken a fresh look at store-level tasks and activities and have taken significant action to make it easier to operate our stores. While we have made progress, we continue to focus on enhancing the overall customer and associate experience in our stores," he said.

The company plans to start with making changes to its self-checkout offering.

"With that in mind, we are making three changes to our self-checkout strategy this year. As a reminder, we currently have self-checkout options available in more than 14,000 stores," he added. "Although adoption rates for self-checkout have been high, we believe there is truly no substitute for an employee presence at the front end of the store to greet customers and provide excellent customer service, including at checkout."

Vasos made it clear that Dollar General was always prepared to make this change.

"When choosing our self-checkout solution, we implemented a product that is convertible from self-checkout to associate-assisted checkout. To that end, we have begun immediately converting some or all self-checkout registers to assisted-checkout options in approximately 9,000 stores. This is intended to drive traffic first to our staffed registers, with assisted-checkout options available as second or third options to reduce lines during high-volume times," he shared.

Walmart and Target won't end self-checkout

Dollar General has a very different business model than Walmart and Target. Its stores have very limited staff so saving labor is not really a benefit of self-checkout as with only one or two people working on some occasions, someone has to be at the front of the store anyway.

In fact, Owen committed to adding $100 million in new labor during his brief period in charge. Vasos is committed to adding workers as well and even raised the dollar amount.

"We completed the investment of $150 million in store labor during the fourth quarter, with the additional hours primarily focused on the two areas we discussed on our last quarterly call. First, we significantly increased the employee presence at the front end of our stores. These team members are dedicated to providing a friendly, welcome, and positive checkout experience for our customers.

Walmart and Target won't abandon self-checkout even if that move makes sense for Dollar General. Advantage Solutions Executive Vice President Andy Keenan explained why

“Self-checkout is not, as one recent article called it, a failed experiment. It’s actually part of the next evolution of the retail customer experience, and evolutions take time,” Keenan said in a web post about the findings of the 2024 Advantage Shopper Outlook survey.

“The notion that we’re going to pivot away from technology that helps offset labor needs and will ultimately continue to improve customer experience because of some challenges is far-fetched. We need to continue to embrace the technology and realize that it may always be imperfect, but it will always be evolving. The noise that, ‘Oh, self-checkout might not be working,’ that’s just a moment in time,” he added.