Five Below Works to Minimize Shrink

Discount retailer Five Below is limiting self-checkouts, adding security guards, and inspecting receipts to minimize theft, a problem that continues to eat into the company’s profits, reports The Wall Street Journal.

Wednesday, the chain said that shrink has accelerated since last year, driving down the company’s fiscal fourth-quarter earnings.

Joel Anderson, Five Below CEO, said that the retailer has limited the number of open self-checkout registers while positioning employees at more checkout lanes. For areas with the highest level of shrink, the stores primarily use traditional checkout lanes.

“We always play offense and intend to aggressively pursue returning to pre-pandemic levels of shrink or offsetting the impact over the next few years,” said Anderson.

Retail theft continues to be an issue for the industry. Last September, Target said it was forced to close nine stores, citing theft as the main driver of the decision. Recently, grocers across the U.S. and Canada said they are turning to locked cases, AI-enabled cameras, and receipt scanners to reduce shrink.

Canadian grocer Loblaw suggested that organized crime is driving much of the retail theft at grocery stores. As a result, it is piloting a technology that requires self-checkout customers to scan their receipt’s barcode to open a metal gate at the exit. Full Story (Subscription Required)

Image: Mike Mozart