Five Below fights back on theft by reducing self-checkout
Five Below’s update on theft comes days after Dollar General said it was cutting down on its use of self-checkout
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Five Below is reducing self-checkout at stores in an effort to prevent theft from cutting further into its bottom line.
The company has "now evolved" to associate-assisted checkout across its over 1,500 locations, CEO Joel Anderson said Wednesday during the company’s fourth-quarter earnings call.
He said Five Below locations susceptible to more "shrink" are mostly offering cashier-run checkouts. The retailer is also adding receipt checking, extra employees and more security guards at such stores, according to Anderson.
A Five Below store in Kingston, New York, on Feb. 21. (Angus Mordant/Bloomberg via Getty Images / Getty Images)
"We expect to have 75% of our transactions chain-wide assisted by an associate with a goal of 100% in our highest-shrink, highest-risk stores to be fully transacted by an associate," he said.
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Anderson said Five Below had earlier "tested many shrink mitigation initiatives late in Q3, into Q4, including product-related tests, front-end initiatives and guard programs."
Five Below has "now evolved" to associate-assisted checkout across its over 1,500 locations, CEO Joel Anderson said. (iStock / iStock)
It reduced the self-checkout registers available at a given time and put employees at the front of the stores but moved to the "additional mitigation efforts," like associate-assisted checkout, after seeing still-high shrink in January, according to the CEO.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FIVE | FIVE BELOW INC. | 83.49 | +0.39 | +0.47% |
Shrink is a term used in the retail industry to describe theft and other inventory loss. Other retailers have also been grappling with the issue lately.
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Five Below reported diluted earnings per share of $3.65 for the fourth quarter, which Anderson said "was at the low end of our internal expectations and can be fully attributed to higher-than-planned shrink." Meanwhile, net sales grew $1.34 billion, or 19.1%, from the same period a year ago.
A pedestrian walks past a Five Below store in Kingston, New York, on Feb. 21. (Angus Mordant/Bloomberg via Getty Images / Getty Images)
Anderson said that Five Below’s tactics to curb theft will help the company "over time" and that it "intend[s] to aggressively pursue returning to pre-pandemic levels of shrink or offsetting the impact over the next few years."
DOLLAR GENERAL DROPS SELF-CHECKOUT AT HUNDREDS OF STORES TO REDUCE THEFT
Five Below’s update on theft comes just days after another discount retailer, Dollar General, said it was cutting down on its use of self-checkout.
Five Below
That company, which has 20,000 stores, plans to lean more into checkout options involving employees and self-checkout item limits.
Retailers saw $112.1 billion in losses from shrink in 2022, according to the National Retail Federation.
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