The ‘Barron’s Roundtable’ panel discusses major retailers that beat the competition on value, their innovation and revenue models.
Your Costco run is about to get a lot faster.
The warehouse giant is reportedly overhauling its checkout process and testing new automated stations that promise to process orders in less than 10 seconds. By combining employee productivity with fast technology, Costco expects it can solve the retail industry’s biggest problems without losing the low-cost model that keeps its members loyal.
“On digital, we continue to make progress on our roadmap to provide members with a more seamless experience in the warehouse and online. In the warehouses, we are achieving meaningful improvements in checkout speed and employee productivity, both as a result of our improvements to the mobile wallet, pharmacy prepayment and the rollout of employee pre-scan technology,” Costco CFO Gary Millerchip said in the company’s second quarter earnings call earlier this month.
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Under new CEO Ron Vachris and Millerchip, the warehouse club is transitioning from its traditional checkout roots to a high-tech pre-scan model and automated pay stations. Initially, employees will speed up the pre-scanning process before customers reach the checkout.
Shoppers at the self-checkout at a Costco store in Napa, California, on Monday, September 22, 2025. (Getty Images)
Costco previously tested self-checkout at select stores, but the system did not appear to stick.
“We are also testing automated payment stations that will allow members to seamlessly pay for their pre-scan orders with an average transaction time of approximately eight seconds,” Millerchip added. “Early results show this is improving traffic flow and we have received great feedback from members.”
The leadership also discussed embracing AI and e-commerce shifts based on the call that rivals have used to dominate the convenience store market.
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“Across our digital sites, we continue to roll out new personalization capabilities that are resonating with our members and beginning to have a measurable impact on e-commerce revenue growth. As consumers embrace AI in their shopping habits, we believe our commitments to providing the best value on high-quality items can give us an advantage from these shifts,” the CFO said.
New data from the NCR Voyix Digital Commerce Index reveals a generational gap in how Americans want to pay at the checkout. While 43% of all consumers now prefer self-checkout options, 53% of shoppers aged 18 to 44 prefer the DIY method, while those over 55 are sticking to manned lanes, with high volumes of shopping carts the main reason for avoiding self-checkout.
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While many big-box retailers have passed on the costs of inflation to consumers in recent years, Costco has maintained its popularity with America’s middle class thanks to its roughly 14% to 15% cap on product margins. Traditional grocers typically have a product margin of 25% to 35%, making Costco’s prices very competitive.
Costco’s net sales rose 9.1% to $68.24 billion in the second quarter, while net profit reached $1.36 billion – up 13.6% year over year after an increase in membership prices.
