Kroger Testing A Self-Checkout-Less Grocery Store

The grocery space is the most significant retail area for self-checkout today, and $82 billion Kroger is the largest grocery chain in the U.S. It is, therefore, intriguing that Kroger is now doing a trial in Texas where it has redesigned a store to completely do away with self-checkout.

But Kroger—a 2,449-store chain in 31 states—is always a fan of experimentation, so this change might be more about trialing a new checkout approach and the removal of self-checkout might simply be a matter of freeing up space in a tightly designed store in an urban Houston, Texas, location. More meaningfully, though, it also reflects a POS approach conflict, with grocers today ambivalent about not only self-checkout but (both old and new) express lanes. It's an age-old argument, but one that is still valid: Why not reward and incentivize your best customers, rather than those who buy the least?

(Related Story: Albertsons LLC Ditching Self Checkout Chainwide.)

Starting in late May, the "new" concept being trialed at the Kroger store on Montrose Blvd., which the chain is calling Metro registers, is little more than a snaking queue approach. Instead of customers with fewer than 16 items choosing a specific express lane, they line up for a group of express lanes, with each person being routed to the one that opens the soonest.

"The Metro registers are manned units that have the ability to check out customers three times faster than standard self-check lanes," Kroger media spokesperson Keith Dailey said in an E-Mail. "This is a one-store pilot program in Kroger's Southwest Division (Texas and Louisiana) that we are still testing and analyzing. As part of its remodel, the Montrose Kroger recently replaced its self-check lanes with Metro registers."

Dailey wouldn't elaborate on "three times faster," so it's unclear what that claim is supposed to measure. Is it from the time someone enters the line to when they leave the store? From when they enter the line to when they reach an associate at a POS? Does it only start when the consumer reaches the POS?

The term "Metro Express" is not being used as store branding, with the only sign visible saying "Express Lane. 15 Items Or Less." The removal of self-checkout lanes is a sharp reversal for a store that, within the last year, increased its number of self-checkout stations 50 percent (from four to six), according to a store manager who asked that his name not be used.

Still, Kroger—like many other major grocery chains—sees the pros and cons of self-checkout lanes. Self-checkout clearly requires fewer associates, with one associate overseeing several of these lanes simultaneously.

But is it a benefit for customers?But is it a benefit for customers? Actually, that needs to be two questions: Is it an actual benefit for customers, and do customers perceive it as a benefit? Indeed, the second part of that question—the perception part—trumps everything else. If it's an actual benefit but customers don't sense that, it's of no value. And if there's no value for consumers but they still somehow believe there is a benefit for them, it's all good.

In fact, that's much of the argument for these snaking queue approaches: Multiple customer interactions make customers feel as though associates are paying more attention to them. Is there an actual speed benefit, from the time customers enter the line to when they leave with their paid-for groceries? Based on experimentation and cashiers at the store, it appears to be an insignificant savings, when it exists at all.

Part of that is because the speed is being compared with that of self-checkout systems, the time of which is extremely variable. How fast is the customer at handling the self-checkout system? How fast were the two customers who were in front of that customer? Self-checkout is fairly fast if the customer is good at it and if no age-verification item or some other glitch crops up. Then everything freezes until an associate can walk over and fix the problem. It only takes a few of those issues an hour for the speed metrics of self-checkout to take quite a beating.

The argument against self-checkout is that it "just rewards cherry pickers" and it gets impressively slow "when someone doesn't follow the rules," said one retail exec involved in grocery checkout issues and who is watching the Kroger trials. "What's especially pernicious is that [both self-checkout and express lanes] discriminate against your best customers."

The opposite argument, though, is equally valid: For the customer who wants to just run in and grab two items, making them wait behind customers doing their full weekly shopping is also bad customer service.

Kroger has also been experimenting with a tunnel system that truly accelerates the checkout process, but that's a much more technologically complex system than the snaking queue approach being tested in Houston.

There's also a very strong demographic component, with younger customers—especially those who would rather not interact with people when purchasing their groceries—much more accepting of self-checkout than their elders.

In short, is Kroger backing away from self-checkout? Probably not. But is it exploring alternatives to not abandoning self-checkout as much as replacing it with something inherently better? Absolutely.

Cameron Laird contributed to this story, reporting from Houston, Texas.