Self-Checkouts Soar In Euro Supermarkets

Supermarkets across Europe are planning to double their number of self-checkout kiosks within three years, said the Financial Times. The publication said $95 billion Tesco is leading the wave of self-serve rollouts, having installed the kiosks in nearly half of its 2,115 U.K. stores.

Citing research from retail consultancy Retail Banking Research (RBR), the Times report also said that the $30 billion J. Sainsbury chain plans to install about 2,000 self-service checkouts in 250 stores by the end of this year, nearly quadrupling its 2008 number. The $23 billion, 403-store Morrisons supermarket chain reportedly used self-checkouts for the first time in late 2008 and is planning to set up more than 1,000 in 270 of its stores before January 2010.

Wal-Mart-owned ASDA, Europe's second largest supermarket chain behind Tesco, "has automated checkouts in 99 percent of its stores, where one in five transactions uses the technology," reported the Times, adding that the chain plans to install self-service units in all of its 346 supermarkets by the spring.

Although soaring, the saturation of self-serve kiosks in European grocery establishments is well behind that found in the U.S. "The U.S. market is far more mature in grocery," said IHL Consulting Group Founder and President Greg Buzek. More than "80 percent of (U.S.) supermarket brands are using self-checkout today, so in many cases it is a replacement market." He said the challenge in the U.S. for self-checkout vendors is to see their units used in retail beyond supermarkets, including Home Depot and warehouse-type supercenters.

The U.S. retail market—especially grocery—started embracing self-checkout years before Europe, partially because of the difficulty of finding enough workers to both staff checkout lanes and provide a lot of the services—deli, flowers, bakery, seafood, helping carry bags to cars, deliveries, etc.—that competition from Wal-Mart and others demanded.

Buzek said the number of self-checkouts in all types of retail stores is increasing 10 percent to 12 percent yearly "but the penetration in grocery is likely to be slower than that because a store must do about $300,000 a week to justify the throughput and return on investment."

RBR predicted that there will be 430,000 retail self-checkout terminals in use globally by 2014, a quadrupling of the current number, and more than half of them will be in North America. It said retail stores in North America have about 80 percent of the world’s self-checkouts, or approximately 74,000 units, while Western Europe has about 15,000 and the Asia Pacific region about 3,000.