How Much Money Has Self-Checkout Saved Albertsons in Idaho?

It's easy to understand why a company would want to lower overhead. The average full-time Albertsons cashier in Boise makes almost $34,000 per year, with the more experienced cashiers making closer to $54,000. When you add in insurance and other benefits, some of the best cashiers cost the company closer to $75,600.

With the technology available and tech-savvy customers, what good businessperson wouldn't think it would be a good idea to try self-checkout?

It's been almost three years since Albertsons on Broadway replaced some full-service checkout lines with the new self-service checkout lines. They knew that when they were installed, there would be a bit of a learning curve for both their employees and their customers. Now, though, those lines are running smoothly. Customers don't seem to mind using them, and it seems like it must be both cost-effective and time-efficient, right?

As it turns out, that's not exactly true. According to the podcast The Economics of Everyday Things, which recently released an episode titled Self-Checkout, the do-it-yourself checkout line now accounts for 40% of all grocery store checkout lines in the country. A system of four self-checkout stands costs $125,000, and the software, maintenance, and installation add even more.

On paper, self-checkout lines should significantly reduce a company's labor cost, but Boise-based Albertsons had a much different experience. Their average store employee count is now ten more people than before they installed the new technology. These new machines have brought unforeseen costs, like the need for more security officers.

When asked, over 14% of customers have admitted to stealing something at self-checkout, costing grocery stores over $10 Billion annually. Even more people have accidentally stolen something they thought scanned but didn't.

In addition to finding that self-checkout lines lower customer satisfaction ratings, these companies did not get the financial numbers they hoped for when installing this expensive equipment. Several companies, like Walmart, have suddenly stopped installing so many self-checkout lines, while some are reserving them for customers with a low item count.

The future of self-checkout is most certainly in doubt. It will be interesting to see how it plays out.