I've never been to a store that gives a discount for self-checkout, but it probably does lower the overall cost of shopping there. there's very little that Walmart can do to differentiate itself from Target, so I would at least expect these kinds of businesses to be forced to pass a lot of the labor savings on to their customers.
if you really hate ringing up your own groceries, there are plenty of higher end grocery stores that have more cashiers (at least in my area). if you want better service, you might need to open up your wallet.
It doesn't. It just increases their profit. What they charge is determined by different people in those organizations. Most vendors have cashiers in Mid-South. Walmart and Kroger are the ones adding lots of self-checkouts with Walmart being about charging less with low service and Kroger charging more with a bit more service. Dollar General and Aldi are cheapest with no self-checkout, but less cashiers.
So, there's your data points. Meanwhile, a lot of companies are getting rid of their self-checkouts since there's tons of theft. They've probably lost more at some places than they saved on laid-off cashiers.
this isn't a self-evident claim. if you have other large competitors who operate in the same market space (for walmart and target, large stores selling a mix of well-known brands and discount store brands), and there is a cost-cutting technique that's available to all participants, it's really hard to employ it and keep all the surplus for yourself. this is especially true if the customers don't like it. I realize this is a naive econ 101 argument, but this particular market is about as close to "perfect competition" as it gets. I personally couldn't tell the difference between target and walmart if you removed all the signs, but if one were noticeably cheaper or more convenient, I would go to that one every time. cost comparisons between walmart and aldi is not particularly convincing; they sell different assortments of products. by not selling such a wide assortment of well-known brands, aldi probably has a significantly more efficient supply chain.
> Meanwhile, a lot of companies are getting rid of their self-checkouts since there's tons of theft. They've probably lost more at some places than they saved on laid-off cashiers.
well this is certainly a confounding factor to my argument. if true, there aren't really any savings to pass on in the first place. maybe it's just a lose-lose for everyone involved.
Your argument makes the common mistake to look at these companies as abstract entities competing based on economic theory instead of groups of humans doing what humans do in businesses. In most cases, the decisions come from middle management that operate based on a mix of competition and what gets them a bonus. Cutting costs or increasing profit within a manager's personal area of responsibility is often a bonus (or promotion) metric. So, many of them keep damaging their own companies to try to get their bonus or promotion. Such companies usually have endless discussions, meetings, and politicking where they explain away their bullshit hoping it will work.
This should be a factor in every discussion of why companies are doing what they're doing. Will the CEO or any managers doing it get an easier bonus or transition for it with minimal liability within whatever period they're working? Well, there you go. That's economic self-interest in the real world.
Source? Grocery stores are a notoriously low-margin business.
When only one uses self checkout, that one sees increase profit. When everyone uses self-checkout, they lower prices to compete with each other; and not using self checkout becomes economically unviable unless you have something else to distinguish you from your competition.
Do you have a source that retail companies follow economic theory versus profit maximization? In a capitalist system, companies try to maximize profit. They usually go into cartel or copycat mode doing the least they can to compete and increase profit. One thing many do is have a self-checkout to cut labor while otherwise running the same way. In the real world, that means the prices and level of service will be the same except for your bad, checkout experience you get so somebody might make a bonus for cutting staff or increasing profit. Capitalism 101.
The funny thing is you all come up with all this stuff that has no connection to what the companies offering self-checkout think. For them, it's much more local kind of reasoning featuring middle managers with incentives to think about.
Now McDonalds is a company which clearly is introducing self checkout to raise their margins, but I don't see any hand wringing about it on this thread.
If you're referring to the order kiosks, that's not really the same thing, since the staff is still preparing your order. In fact, I prefer those kiosks, as I can use them to remove a point of failure and ensure that my order goes into the system correctly.
That doesn't tell you anything for two reasons: missed profit by mismanagement and operating vs net profit. Especially those companies.
First one. I have friends that work at every retailer you named. Every one of them intentionally leaves stuff empty on the shelf to get workers to do side jobs, esp displays, reports, abd various meetings. Walmart and Target start throwing money away towards the afternoon after they're mostly stocked. Kroger starts leaving stuff empty in the morning to do scans or "walks" as employees describe them. None of these intentional losses are in their annual reports or the media. Latter being because they're big customers of media.
Second part. The percentages you quoted are whats left after all their big spending. For instance, both Walmart and Kroger in my area are doing million dollar remodels. Although some are welcome, many changes are just moving shit around. Customers wouldve kept shopping regardless. So, that easily couldve stayed in final profit. They often give executives raises in 6-7 digit range. They have way more managers in stores and offices than Publix which is more profitable. Also, local Kroger uninstalled some registers and added more self-checkouts despite their profit going up just before that. Obviously, the two weren't connected.
So, the operating profit vs justifiable expenses is what to look at along with management practices which you get surveying employees. When management is bullshitting, the employees are often more than happy to tell you about it if you seem sympathetic and esp have your own stories. Once I knew it was intentional, I almost entirely boycotted Walmart and Kroger with me going to companies like Costco, Aldi and Piggly Wiggly who still stock shelves. Piggly Wiggly and Trader Joe's also still have plenty of checkers/baggers despite "tough market conditions" others report. And that Piggly Wiggly is in one of most cut-throat areas price-wise. Talking $0.89-0.99 cent gallons of milk at all stores at times with Aldi dropping eggs to $0.28. Fresh Market straight-up canceled their store mid-construction seeing how rough it was.
