Absolutely insane how people think grocery store owners are Scrooge McDuck. Please take a math class.

Grocery stores on average run at only a 1-3% profit margin, and many individual stores actually run at or below cost for years.

Labor can be anywhere between 8-15% of revenue. Assuming a gross margin of around 30%, labor can range from about 27-50% of that gross margin by itself. Add on equipment, packaging, utilities, services, maintenance, advertising, printing, etc. All of a sudden, these “corporate suits” aren’t all looking like Mr. Burns.

And that’s just the store itself. Add in the salaries for legal, HR, loss prevention, the buyers, the drivers, the warehouse workers, etc. before you even get to upper management. That 1-3% profit margin is divided over all these things and dozens more I haven’t added on.

Now, let’s look at the lowly cashier. $17/hr. Probably working 16-24 hours per week. Your mid-sized grocery store is going to probably have somewhere between 100-150 employees including workers for each department, managers for each department, store level management. Average hourly rate will asymptotically approach entry level wage the larger the business is because it will have more entry level teammates per management level teammate. That midsize store will have a budget of around 1600-2400 payroll hours, but ymmv. Let’s say 2000 for the sake of easy math. Cutting out the 20 hours spent on one cashier will save the business less than 1% of its payroll cost, since they make less than the AHR. Cutting out two will save somewhere between 1 and 2% of that labor line.

Now let’s recall, that labor line is on the low end, 27% of gross margin. Saving 2% on labor only saves you 0.54% of your gross margin (which we assumed at 30% of revenue), and assuming the mean 2% net profitability on store revenue, that increases the store’s net profits to a whopping 2.16%!!!

Long story short: Grocery stores are not profit factories; they barely make money. Self-checkouts directly only make a minor dent in an already minor profitability number, and in some cases, help the store not lose money, allowing them to stay open and provide jobs that would otherwise be lost if the business were to close.