Grocery carts

Part
01
of six
Part
01

Lifetime of Shopping Carts

We calculated that the typical shopping cart lasts for 5.9 years based on credible data provided by multiple industry sources. The fewest number of years that any industry source said that a shopping cart lasts for is two years, while the greatest number of years that any industry source said that a shopping cart lasts for is ten years. Below is an explanation of our research methodology, the information that we found about how long a typical shopping cart lasts, our calculations for how long a typical shopping cart lasts, and additional information about shopping carts.

Methodology

We found credible information about how long a typical shopping cart lasts and thus, provided all the requested information about this topic. Before delving into that information, we just wanted to briefly mention that the reason we used a credible source from 2012 for this information is because it provided data from five, very credible industry sources regarding how long shopping carts last. Since our goal was to determine how long a typical shopping cart lasts, this was the best source for us to use because it allowed us to factor in five different data points from multiple industry sources in the U.S. This was better than finding just one source that purported to state how long a typical shopping cart lasts, without factoring in information from other sources. We then used that data provided by the five industry sources and calculate the average length of time that a typical shopping cart lasts for. That data and our calculations are described below.

how long a typical shopping cart lasts

  • To determine how long the typical shopping cart lasts, we found information about such from five different industry sources (four executives/directors and one company).
  • The first industry executive is Craig Smith who is the owner of a shopping cart retail distributor company called Premier Carts which is based in Kansas. According to Smith, "[m]ost shopping carts last four to six years in high-volume stores." However, Smith further notes that shopping carts "can last longer if they are kept inside and taken care of."
  • The second industry executive is Jesse Roche who is a director at a Florida-based company called Jimco Maintenance Inc. which provides a "preventive maintenance program" for shopping carts. According to Roche, "carts will last eight years with Jimco's preventive maintenance program, while carts on a reactive maintenance program will last four years, and carts with no maintenance will last two years."
  • The third industry executive is Phil Goodell who is the president of a "[Tenn[essee]-based shopping cart distributor [called] Good L Corp." According to Goodell, carts that are not located in "tough, urban" places "should last over five years." Goodell also notes that "shopping carts should be inspected and repaired at least annually."
  • The fourth industry company is Swanson of America. According to Swanson, "[m]ost [shopping] carts will last at least five years in high-volume stores and seven to 10 years in medium-volume stores if they are kept in good working condition." Swanson also notes that shopping carts should be repaired "after 12 to 18 months to avoid excessive repair costs."
  • The fifth industry source is Dennis Curtin who is a director at the supermarket chain Weis Markets, which is based in Pennsylvania. According to Curtin, "[t]he [shopping] carts last an average of seven years."

calculating the average length of time a shopping cart lasts

  • Given the similar, yet slightly differing estimates of how long typical shopping carts last, we decided to average the time estimates provided by the aforementioned, five industry sources instead of relying solely on any one of them to the exclusion of the other credible sources.
  • Before we do so, we want to reiterate that most of the above sources noted that the amount of time a typical shopping cart lasts depends on factors such as how busy the store is, maintenance/repair, and weather.
  • Also, some of the sources provided more than one time-duration range based on such factors.
  • Since our goal is to determine how long a typical shopping cart lasts, we first listed the low and peak range of the time spectrums provided and then determined and utilized the averages within those ranges for calculating how long a typical shopping cart lasts (with those calculations included below).
  • The average length of time for how long a typical shopping cart lasts, according to the above-mentioned industry sources are as follows: (1) 4-6 years; (2) 2-8 years; (3) more than 5 years; (4) 5-10 years; and (5) 7 years.
  • For the sources that provided time ranges, we used the average within those ranges for calculating how long a typical shopping cart lasts.
  • Those averages are as follows: (1) 5 years (the average of 4-6 years, since 4+6 = 10 and 10/2 = 5); (2) 5 years (the average of 2-8 years, since 2+8 = 10 and 10/2 = 5); and (3) 7.5 years (the average of 5-10 years, since 5+10 = 15 and 15/2 = 7.5).
  • Lastly, for the source that said shopping carts "last over five years," we used five years as the data point because it was the sole concrete number provided by that source.
  • Next, we used those averages that we calculated and the concrete numbers provided by the other sources and added them together as the first step in calculating how long a typical shopping cart lasts.
  • That calculation was as follows: 5 + 5 + 7.5 + 5 + 7 = 29.5.
  • To calculate the average, we then divided that sum (29.5) by five (the number of data points used), which equals 5.9.
  • Thus, according to our data-based calculation, a typical shopping cart lasts 5.9 years.

additional, INTERESTING information about shopping carts

  • In addition to the above information about how long a typical shopping cart lasts, we also found some more interesting information about shopping carts.
  • First, we found that "[m]ost manufacturers of polyurethane wheels [which are used on shopping carts] state the average life of a wheel is 2 years. So replacement of wheels should only happen upon the wear and tear of an approximate 2 year cycle."
  • Second, according to the president of a shopping cart manufacturer, between "20 million to 25 million sets of [shopping cart] wheels [are] on retail sales floors at any given time."
  • Third, the average grocery store in the U.S. has between 200 and 250 shopping carts.
  • Lastly, the shopping cart has been around since 1937.
Part
02
of six
Part
02

Grocery Stores Spend on Shopping Carts

The total amount of US grocery stores spend every year to buy, maintain, and replace a shopping cart is between $236 and $452. The typical cost of purchasing a shopping cart in the US is between $90-$200, annual maintenance and replacement costs range from $71-127 and $75-125, respectively. 12% of shopping carts in grocery stores need to be replaced yearly, due to theft.

RESEARCH STRATEGY

We were unable to find the cost of maintaining a shopping cart, after looking through several research reports from the Food Marketing Institute. We also looked through credible news websites like Forbes, CNN, LA Times, The Suburban Times, etc. However, the information was unavailable. We then decided to look for the types of maintenance associated with shopping carts, searching through several maintenance sites like Mileham Inc., Americana Companies, Carts & Parts, Inc., Western Cart, etc. From Western Cart, we found all the maintenance services required for shopping carts, and we worked from there to attain the costs of the frequently needed services, as the information for others was unavailable. In triangulating the cost of maintaining shopping carts, we use this information to calculate the figure but were unable to establish a timeline for their occurrence. However, we found a source that stated the lifespan of shopping cart wheels/casters which we used to form a schedule for their maintenance. All other calculations and assumptions are presented below.

ASSUMPTIONS/CALCULATIONS

ANNUAL COST OF BUYING, MAINTAINING AND REPLACING A SHOPPING CART FOR GROCERY STORES IN THE U.S.
  • Cost of purchasing a shopping cart = $90-$200

Assuming that the seat belts and caster/wheel both have a lifespan of two years:
  • Cost of maintenance for seat belt, caster and rear wheel of 5 carts = $151.92
  • For one cart, cost of seat belt, caster, and rear wheel maintenance = $151.92/5 = $30.384 per two years and $15.192 per year
  • Cost of welding = $50-$100 (assuming it is welded once every year)

Assuming pressure washing to be carried out once every month to remove the germs due to customer handling,
  • Annual cost of pressure washing = $0.50 x 12 months to $1 x 12 months = $6-$12, annually.
  • Total maintenance cost per year = [($15.192+$6+$50) to ($15.192+$12+$100)] = $71.192-$127.192, which is approximately $71-$127
  • The annual cost of buying, maintaining and replacing a single shopping cart = cost of purchase + cost of replacing + total maintenance cost per year.
  • The annual cost of buying, maintaining, and replacing a single shopping cart = [($90+$75+$71) to ($200+$125+$127)] = $236-$452

COST OF BUYING A SHOPPING CART

  • A shopping cart typically costs between $90-$200 in the US. However, the types of shopping carts used by grocery stores may vary, as well as their cost.
  • The types of shopping cart and their cost variations include; liquid store cart ($125-$175), double basket cart ($150-$200), smaller metal cart ($150-$200), heavy-duty small/medium/large cart ($125-$175), and extra large cart ($150-$200).
  • For shopping carts that employ anti-theft technologies which enable them to lock their wheels and prevent theft, the price may be double.

COST OF MAINTAINING A SHOPPING CART

  • The annual cost of maintaining a shopping cart is between $71-$127
  • The procedures involved in maintaining a shopping cart range from wheel/caster repairs, handlebar replacements, seat belt replacements, pressure washing, frame straightening, and welding.
  • Carts and Parts, Inc sells a 5-cart replacement kit which contains ten rear poly cartwheels, ten front swivel casters, and ten black seat belts for $151.92.
  • Pressure washing of shopping carts cost as low as $0.50-$1.00, while welding of carts cost from $50-$100, depending on the level of damage.
  • Shopping cartwheels/casters have an average lifespan of two years.

COST OF REPLACING A SHOPPING CART

  • According to the Food Marketing Institute in Washington, grocery stores lose around 12% of their shopping carts every year, and for retailers such as Walmart, it can cost between $75-$125 to replace one.

Part
03
of six
Part
03

Largest Shopping Cart Companies

In this study, we found that the largest companies in the U.S. related to the shopping cart space include Technibilt, Ltd., Unarco Industries, Americana Companies, VersaCart Systems, Inc., The Peggs Company, Advance Carts, and R.W. Rogers Company. Below is a detailed explanation of our methodology and findings.

METHODOLOGY

We initially started the research by searching for public information available regarding the rank measures of the U.S. companies by revenue or market capitalization. However, we could not find any available relevant information. Next, we attempted to find publicly available information from credible online sources such as Owler, MacRumors’ Buyer’s Guide, Craft, and ZoomInfo regarding the competitors of VersaCart Systems, Inc. Unfortunately, we could not find any relevant information regarding cart manufacturers most likely because the sources mentioned categorized VersaCart specifically under retail and groceries.
Lastly, we attempted to search for the global market of shopping carts. We found a list of global shopping cart market analysis segmented into different regions. However, the important details of this list are blocked by a paywall. Therefore, we selected the top players worldwide from the list, found relevant sources that provide the companies’ global competitors, and selected the firms that are located in the U.S. These companies have an active website and produce carts for shopping and grocery. Moreover, we analyzed the companies further by searching for databases that provide the companies’ profile such as Owler, Crunchbase, and ZoomInfo to gather more information regarding these companies’ annual revenue.

THE LARGEST SHOPPING CART COMPANIES IN THE U.S.

TECHNIBILT, LTD.
Technibilt, Ltd. generates $22.4 million annual revenue and has more than 70 years of experience. The company provides different products and services including shopping carts, display and shelving, service and maintenance, and many more.
UNARCO INDUSTRIES
Unarco Industries, which was founded in 1937, generates annual revenue amounting to $10 million. Based in Wagoner, Oklahoma, the company provides products and services including carts, shelving units, tables, and many more.
AMERICANA COMPANIES
Americana Companies, which was founded in 1975, generates $9 million revenue every year. The company provides plastic and wire carts.
VERSACART SYSTEMS, INC.
VersaCart Systems, Inc. generates $7.6 million annual revenue and is providing different carts including shopping carts, material handling carts, stocking carts, and many more.
THE PEGGS COMPANY
The Peggs Company generates annual revenue amounting to $7 million and is providing shopping carts within North America. The company has partnered up with Firefly, a car rental company headquartered in the U.K.
ADVANCE CARTS
Advance Carts generates $5.4 million revenue every year and has different advanced carts including the Xpress series. The company also offers plastic and metallic carts.
R.W. ROGERS COMPANY
The R.W. Rogers Company, which was established in 1963, generates $2.4 million annual revenue. The company provides metallic and plastic shopping carts.
Part
04
of six
Part
04

Largest Vendors of Automated Check Out Solutions

In reference to our findings, the top six vendors of automated checkout solutions for grocery stores by revenue in the United States are International Business Machines Corporation, Diebold Nixdorf Inc, NCR Corporation, Toshiba Global Commerce Solutions, Pan-Ostan Co, and ECR Software Corporation. Further details of our research methodology and findings follow below.

METHODOLOGY

To identify the top six vendors of automated checkout solutions for grocery stores in the U.S. in terms of revenue, we initiated our search by referring to the credible market research reports on the global and U.S. automated checkout solutions market i.e. reports by Markets and Markets, IBIS, Open PR, and Psmarket Research. Through this strategy, we found that various reports listed similar vendors as key market leaders in the United States.

We went further by researching each company through official company websites, financial reports, and press releases. Through this, we were able to confirm that the target companies offered automated checkout solutions for brick and mortar grocery stores. Additionally, we also searched for relevant information by referring to credible informational databases like Hoovers, ZoomInfo, and Crunchbase where we found the revenues of the top companies. We then ranked the companies by revenue because it was the best publicly available metric for each company.

TOP VENDORS FOR AUTOMATED CHECKOUT SOLUTIONS FOR GROCERY STORES

1. INTERNATIONAL BUSINESS MACHINES CORPORATION (IBM)

Description


Website and Revenue

2. DIEBOLD NIXDORF INC

Description

  • Diebold Nixdorf is an end-to-end solution provider for strategic hardware and software solutions in the financial and retail outlets. The company has an implementation of more than 1 million retail POS solutions in about 90 countries and through its self-checkout solutions, it claims to have saved approximately 300 million hours annually.

Website and Revenue

3. NCR CORPORATION

Description


Website and Revenue

4. TOSHIBA GLOBAL COMMERCE SOLUTIONS

Description


Website and Revenue

5. PAN-OSTAN CO

Description


Website and Revenue

6. ECR SOFTWARE (ECRS) CORPORATION

Description


Website and Revenue

Part
05
of six
Part
05

Grocery Stores Spending on Automated Check Out Solutions

We estimated that grocery stores in the US spend $310 million on self-checkout systems annually.

METHODOLOGY

We searched research reports by agencies like Global Market Insights, Transparency Market Research Prescient & Strategic Intelligence, Research and Markets, and QY Research for the annual spending on automated checkout solutions in grocery stores. All the reports we came across were for the global or North American market, none were specific to the US. Also, most reports did not make any information on the retail vertical publicly available. Next, we searched industry portals like Progressive Grocer, Supermarket News, Grocery Headquarters, and the Food Marketing Institute. Most of the information we found on these websites pertained to the pros and cons of self-checkout (SCO) systems and news related to the adoption of such solutions. Following this, we looked through SCO solution vendor websites and annual reports like NCR, Toshiba, Diebold Nixdorf, but none of these companies provide any information about the US SCO market. Neither was there any quantitative information about SCO in the retail vertical.

FINDINGS

  • Estimates for the market size of the global self-checkout market:
--Global Market Insights: $2,000 million (2016)
--Transparency Market Research: $2,280 million (2016)
--Prescient & Strategic Intelligence: $2,522.1 million (2017)
--QY Research: $2,520 million (2017)
  • As estimates provided by QY Research ($2,520M) and Prescient & Strategic Intelligence ($2,522.1M) are the same, and they are for the year 2017 (not 2016), we used the $2,520 million estimate to triangulate the market size of the US grocery store self-checkout market.
  • According to Transparency Market Research, the North America market size is $813.4 million. This translates to a market share of 35.68% (813.4M/2,280M) of the global market. Therefore, in 2017, North America’s market size for self-checkout counters was $899 million (35.68%*2,520M).
  • To calculate the US self-checkout market size, we assumed that the share of the US market in North America’s self-checkout market is in the same proportion as its GDP. The GDP of the US makes up 85.44% of North America’s GDP--calculations have been shown in the attached spreadsheet. Therefore, the US self-checkout market is worth $768 million (85.44%*899M).
  • GM Insights estimates that the size of the UK’s self-checkout market is $240 million (100M+30M+20M+ 50M+25M+15M). Approximately, $100 million of this market can be attributed to the retail vertical. Therefore, retail comprises 41.67% (100M/240M) of the self-checkout market in the UK.
  • As UK is a developed market like the US and the adoption of self-checkout kiosks across different verticals—retail, entertainment, healthcare, hospitality, travel, etc.—is likely to be the same, we assumed that the retail vertical in the US self-checkout market will also comprise 41.67% of the whole market. Therefore, the size of the US retail self-checkout market is $310 million (41.67%*768M).
  • Retail comprises “hypermarkets, supermarkets and departmental stores, convenience stores, and others, where ‘others’ include grocery stores, pharmacies, and other small-sized stores”. Given that the purpose of this research is to understand the potential of the market for self-checkout systems used in grocery stores like Kroger and Publix (supermarkets), we have understood this to mean the entire retail vertical. Also, the largest use of such systems in the retail space is at supermarkets that are looking to minimize wait times and offer hassle-free checkouts to consumers.

CONCLUSION

The annual spending of grocery stores in the US on automated checkout solutions is $310 million.

Part
06
of six
Part
06

Grocery Stores Implementation of Automated Checkout Solutions

Grocery stores in the United States determine and evaluate whether to implement an automated checkout solution by analyzing the increase in sales from repeat purchases, reduction in labor cost, prevention against shoplifting and rate of return received after installing the self-checkout system.

We utilized market research, press release and case studies published by grocery chains such as Walmart, Target and Kroger to extract the relevant information. We have assumed that market research published by one grocery chain would also be applicable for all the other grocery chains. We also utilized news articles by trusted media publications, MIT case studies and academic research papers to determine the factors that influence grocery stores while implementing an automated checkout solution.

CONSUMER PREFERENCE and CHARACTERISTICS

  • Customer feedback: According to Dylan McMahan, a Scan, Bag, Go specialist, grocery stores such as Kroger decided to implement an automated checkout system based on customer feedback expressing interest in spending less time in the checkout lines, especially customers who are in a rush. The customer feedback was received through customer surveys and social media polls.
  • Technology savviness: Grocery stores also determine the locations to install an automated checkout system based on the digital activeness and technology savviness of the target customers shopping at that location. This is measured by the number of customers who use digital coupons and regularly utilize a self-checkout system at the location.
  • Repeat purchases: In 2011, the grocery store Kroger installed automated checkout systems in its stores as these systems were inducing customers to make repeated trips to the grocery store by enhancing their shopping experience.

LABOR COST

  • Reduction in labor costs: According to Adrian Beck, a professor at the University of Leicester, one of the major consideration while installing automated checkout solutions is the reduction in labor cost. Labor costs such as wage bills are usually the largest portion of a retailer's expenses. Installing automated checkout solutions would significantly reduce this cost. For example, at a retail store, a single supervisor was able to single-handedly oversee 23 self-checkouts systems, thereby reducing the labor costs at these checkout systems. The Bureau of Labor Statistics forecasts the number of cashiers will continue to fall in the future in spite of a growing retail sector.

SYSTEM EFFECTIVENESS

  • Product identification: According to a press release by Kroger, the company decided to install automated checkout solutions in its grocery stores as these systems have a product identification rate of about 98 percent and can recognize stacked items even when the item bar codes are hidden.
  • Prevention against shoplifting: Many grocery stores have implemented automated checkout systems with computer vision and facial recognition which are effective in preventing shoplifting. Grocery stores like Amazon Go have installed camera and sensor technology along with their automated checkout systems to prevent thefts.
  • Intuitiveness: According to a report by MIT, grocery stores decide the effectiveness of automated checkout solutions based on its intuitiveness and user-friendliness which can enhance the user experience by resulting in shorter lines, expedited checkout, more control, and more privacy.

SALES and COMPETITION

  • Rate of return: Grocery stores use analytic to evaluate their POS transaction logs (T-logs) and determine if self-checkout is an appropriate addition to the store's infrastructure. Analytic includes the volume of transactions, the average amount of each purchase and the purchase methods. Using this data, the store is able to determine which automated self checkout systems to implement and which will provide the best return on investment.
  • Implementation by competition: To combat competition from Big Box retailers, many grocery stores are installing automated checkouts to stay relevant and attract more customers. These technologies are helping smaller grocery stores to attract younger shoppers away from their competition.
Sources
Sources

From Part 04
Quotes
  • "Globally, North America held the largest share in the self-checkout systems market in 2017, on account of the presence of a large number of hypermarkets and large-sized stores in the region and the early introduction and adoption of advanced technologies."
Quotes
  • "The major players operating in this market include NCR Corporation (U.S.), Toshiba TEC Corporation (Japan), Fujitsu Limited (Japan), Diebold Nixdorf, Inc. (U.S.), ECR Software (ECRS) Corporation (U.S.), Pan-Oston Co. (U.S.), ITAB Scanflow AB (Sweden), and PCMS Group plc (U.K.), among others."
Quotes
  • "Sales items seen on Digital Displays use NCR Self-Checkout to get out of store faster. More than 1 Million people view digital signs powered by NCR."
From Part 05
Quotes
  • "Self-Checkout System Market size is set to exceed USD 4 billion by 2024; according to a new research report by Global Market Insights, Inc."
  • "Self-Checkout System Market size was estimated at over USD 2 billion in 2016 and is predicted to grow at over 8% CAGR from 2017 to 2024."
Quotes
  • "Based on retail store, the market has been categorized into hypermarkets, supermarkets and departmental stores, convenience stores, and others, where “others” include grocery stores, pharmacies, and other small-sized stores. Among these, hypermarkets contributed the largest revenue in the self-checkout systems market in 2017."
  • "The global self-checkout systems market was valued at $2,522.1 million in 2017 and is forecasted to witness a CAGR of 10.7% during 2018–2023. "
Quotes
  • "In 2016, the market reported an opportunity of US$2.28 bn. Expanding at a CAGR of 10.80% between 2017 and 2025, the market is projected to reach a value of US$5.85 bn by 2025."
Quotes
  • "Global self-checkout systems market is expected to reach $4,642.7 million by 2023, advancements in technology, growing consumer inclination toward convenient checkout methods, and labor-shortage issues in consumer stores are the major factors contributing to the market growth."
Quotes
  • "The global Self-Checkout Systems market was 2520 million US$ in 2017 and is expected to 5940 million US$ by the end of 2025, growing at a CAGR of 11.3% between 2018 and 2025."
Quotes
  • "As per the estimations of researchers, the global market for self-checkout systems, which stood at US$2.28 bn in 2016, is anticipated to expand at a CAGR of 10.80% during the period from 2017 to 2025 and reach a value of US$5.85 bn by the end of the period of the forecast."
Quotes
  • "The global Self-Checkout Systems market was 2520 million US$ in 2017 and is expected to 5940 million US$ by the end of 2025, growing at a CAGR of 11.3% between 2018 and 2025."