According to data from Capital One Shopping and ECR, 96% of U.S. grocery stores offer self-checkout options. About 40% of grocery store registers are self-checkout. About 77% of non-grocery retailers offer some form of self-checkout option.
For consumers, the concept of self-checkout lanes often provokes a variety of reactions. Some don’t mind, others complain. We go into a store, spend money, and end up doing a job for our employer. We don’t get paid. We don’t get benefits. We don’t even get invited to the company Christmas party.
But over the past few years, the use and adoption of self-checkout kiosks has been steadily increasing. Perhaps more importantly, there’s evidence that, as consumers, we don’t seem to care much about this nebulous concept of customer and employee.
Self-checkout options come in a wide variety of types and can be found in grocery stores, supermarkets, department stores, fast food restaurants, gas stations, amusement parks, movie theaters, parking lots, and are often accessed through a mobile app on a cell phone or laptop.
Anyone else reading this…
As of 2024, the North American self-checkout systems market is worth $2.68 billion, up 65% since 2021. By 2030, the market is expected to exceed $6 billion. According to a global survey by Zebra Technology, 82% of retail decision makers plan to increase their investment in self-checkout technology by 2025. 45% plan to transition more traditional manned registers to self-checkout.
The primary benefit to retailers is reduced labor costs. The federal minimum wage is currently $7.25 per hour, but 31 states (62%) have enacted minimum wage laws that exceed the federal requirement. Currently, Washington state has the highest minimum wage at $16.28 per hour, followed by California at $16 per hour. However, California recently raised its minimum wage for most of its fast food industry to $20 per hour.
Locally, Iowa’s minimum wage is $7.25 an hour, matching the federal minimum wage, while Illinois has one of the highest minimum wages in the nation at $14 an hour, which is set to increase to $15 an hour on January 1, 2025. In Chicago, the current minimum wage is $15 an hour for businesses with 4-20 employees and $15.80 an hour for businesses with 21 or more employees.
But the shift away from manned registers has some drawbacks. Capital One Shopping notes that self-checkout kiosks increase theft by 65%. 15% of consumers intentionally use self-checkout kiosks to steal, and of those, 44% admit they plan to do it again. The average value of items stolen per theft is $60. And then there’s accidental theft: 21% of thefts at self-checkout are considered accidental, where shoppers simply don’t realize their items aren’t being scanned.
So what are Americans’ views on self-checkout? The results may surprise you: A Capital One Shopping survey found that 73% of American consumers prefer self-checkout kiosks over traditional manned registers. In fact, 79.3% complete more than half of their shopping at a self-checkout kiosk, 59.6% have increased their use of self-checkout in the past year, and 52.8% plan to do so in the next 12 months. The main reason for this preference is speed: 85% of customers say self-checkout is faster than traditional registers.
But its popularity depends heavily on age: According to a PlayUSA survey, 84% of Gen Z shoppers (born between 1997 and 2021) prefer self-checkout over traditional registers. This preference drops to 76% for millennials (1981-1996), 57% for Gen X (1965-1980), and just 46% for second-generation baby boomers (1955-1964).
Love them or hate them, self-checkout aisles are here to stay. Retailers are increasingly turning to them for efficiency and cost-effectiveness. It’s by no means a perfect system; retailers’ goal is to make the process more user-friendly. Just don’t expect to get invited to the grocery store employee Christmas party.
Mark Grywacheski is an expert in financial markets and economic analysis and an investment adviser with Quad Cities Investment Group in Davenport.
Disclaimer: Opinions expressed herein are subject to change without notice. Prices and quotes stated herein are indicative only and do not constitute an offer to buy or sell securities at any particular price. Information has been obtained from sources believed to be reliable, but no guarantee is made that the materials presented are accurate or provide a complete description of the securities, markets, or trends referenced. Quad-Cities Investment Group LLC is an investment adviser registered with the U.S. Securities and Exchange Commission.
