Contestants, are you ready for the latest installment of Skeptical, Optimistic or Just Not Sure?
Please be ready to buzz in and email me your responses at mitch.morrison@informa.com. We’ll let you know how our industry is feeling.
Round 1. The Economy
Optimistic: More than 600,000 jobs combined were created in January and February combined. Unemployment continues to sit below 4%. No major setbacks from COVID. More workers are returning to their offices (at least three to four days a week). Gasoline prices have been stable, consistently below $3.50/gallon nationwide. The Federal Reserve intends to cut rates this year.
Skeptical: Credit-card delinquencies are at a 14-year high, auto-loan delinquencies at a 13-year high. Inflation, while cooling down, remains untamed, with consumer prices up 3.2% from a year ago through February. The federal deficit grows and grows with each passing month. Family Dollar plans to close 1,000 stores and even McDonald’s is voicing concern for the consumer.
Just Not Sure: Consumer confidence picked up in the final months of 2023 and in January but slid in February. Consumers are spending money, but basket sizes are smaller. Inflation costs for eating out are outpacing eating at home. Home sales are up and down, with the Northeast and West posting monthly gains in January, while the Midwest and South recorded losses.
Round 2. Self-Checkout
Optimistic: Customers love self-checkout (SCO) for its speed and offering them the choice on full- and self-checkout. Many retailers say SCO is saving them money on labor costs. And some boldly predict that over the next several years smart technologies will allow them to customize promotions via the combo of Rewards and SCO, where checkouts will discern consumer behavior and communicate to the consumer’s rewards app.
Skeptical: Shrink is higher with self-checkout. Fifteen percent of self-checkout users confess to purposely stealing (according to LendingTree) and seven of 10 of self-checkout users agree SCO is easier for stealing. Some retailers complain of frequent malfunctions, including frustration over intersecting scanning with their pricebook, as well as reading bar tags that are moist or slightly faded. And they have doubts about labor savings.
Just Not Sure: Love the speed and relative simplicity, but is self-checkout really accelerating the queue when customers typically purchase fewer than five items?
Round 3. EVs
Optimistic:Federal incentives are providing financial rationale to install electric vehicle (EV) chargers. Sales of EV cars, while somewhat sluggish, are still growing. C-stores are all about giving consumers choices so why not give them the choice on how to fill up or charge?
Skeptical: Few motorists are using EV charging and the equipment installed today will be obsolete by the time the electric-charging becomes business viable. And EVs are a fad, anyway.
Just Not Sure: Plug-in could be more viable if the nation embraces plug-in hybrid as a long-term solution, rather than a transition. And while no one is expecting charging to retire cars with combustion engines anytime soon, there’s also a risk if c-stores stand on the sidelines while other channels, like big box and QSRs, leverage their scale to go full throttle into EV infrastructure.
Final Round. Shrink/Theft
Optimistic: Yes, things were rough last year as we saw shrink double, but with an improved economy and better security system, more retailers are seeing shrink fall between 1% and 1.5%, and even lower in some markets.
Skeptical: Theft is out of control. Gangs are on the rise. More convenience operators are locking up high-theft items. Law enforcement doesn’t care about what it perceives as petty crime. Rates are as high as 3% and some chains are closing stores in high-crime neighborhoods.
Just Not Sure: Theft is up modestly but some of that is tied to self-checkout. It’s a concern but not a big one.
Okay contestants, time to cast in your votes. Please let me know where you stand on the issues. Vote early and often.
Mitch Morrison is vice president of retailer relations at Informa Connect. Reach him at mitch.morrison@informa.com.
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