The Best of Creative Computing Volume 1 (published 1976)

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Why Supermarkets Are Going Bananas Over Computers (new receipts, scanning groceries)

graphic of page

ertson, vice-president of information systems tor Ralphs Grocery Company in Los
Angeles. "We hope customer delay at the checkstand will be minimized by
automatic handling of some of the more tedious transactions like check cashing,
coupon redemptions, bottle returns and food stamps."

Ralphs, which planned to test the IBM 3660 system in its Lakewood, California,
store last month, is pushing hard on customer service. "Accuracy is the big
word," notes Robertson. "With the prices of most items retrieved from the store
computer, the customer will not miss any sale or promotional price, and will
always be charged the correct amount ot sales tax on the correct taxable item."

Some consumer groups and other local shoppers have already registered their
displeasure with the move to automate grocery checkstands. They have no
obiections to swift moving lines or the automatic dispensing of trading stamps.
What they are objecting to is the grocery industry's concerted move to eliminate
price stamping on each item.

Complains one Chicago housewife: "I just can't imagine going into a store and
comparing can goods where there is no price marked on the top. You can't compare
the codes, I understand, and the shelf tags are always jumbled up. I don't know
how it's going to work. I just don't see it."

Jim Roberts, the Troy, Ohio policeman who likes to "go to the grocery store"
with his wife Sharon, agrees. Commenting on the test now underway at Marsh's,
Roberts reports that the scanners "don't pick up all the prices all of the
time." Evidencing a basic distrust of computers, he says the "worst thing they
could do is take off all the old prices. lf the thing (the scanner) is not set
right, it could be eating you alive and you'd never know it."

Store manager Earl Frysinger says the test at Marsh's is going "very well. lt's
given us faster front end service and more accurate cash control, plus it's
simplified our office bookkeeping." How are customers reacting to the test? "We
haven't had too much controversy," he replies. "But, then, we held a meeting
with 24 housewives beforehand and explained it to all of them." Still, every
item in the store is double priced-UPC coded and stamped on top. Mr. Frysinger
has no idea when he'Il drop the stamped price.

[image] What your "new" shopping receipt might look like after the computer
computes it. Photo courtesy of IBM Corp.

Probably not for a long while. Robert Cottrell, vice-president of store
operations for The Kroger Company of Cincinnati, reported that its
experimentation with RCA on automated checkout (since taken over by Sperry
Univac) showed that shoppers react "negatively" when the prices are scrubbed.

"The removal of individual item pricing on dry goods," he explained in a recent
report, "as expected, resulted in significant declines in the
rating of the Kroger test store for 'adequate price information.'" Shelf strips
are not a fully accepted replacement tor item pricing, he added.

Clearly, the price stamping question is a hot potato now and few POS equipment
makers are willing to address themselves to it publicly. Others, like Richard
Baily, president of the Singer Company's Business Machines Division, takes the
more positive approach and contends that it will take some patience and
education, but within a couple of years at most, coded items will be smoothly
sailing across the scanner and no objections will be heard.

Patience and education seem to be the watchwords today when it comes to POS and
particularly scanning. As noted earlier, retailers are clearly interested;
scanning equipment makers drew record crowds at the Super Market Institute's
convention in Dallas last May. But price is a stumbling block for many chains.
Price of an eight terminal IBM system at the Dallas show was $118,760, according
to Supermarket News, the industry tradepaper, while Univac asked $106,700 for a
five checkout lane scanning system.


Nevertheless, some chains are putting their toes in the water and going the
minicomputer-Iinked-to-an-electronic-cash-register route. Singer, for instance,
has signed Mayfair Markets in Los Angeles; Sweda International has a contract
from Albertson's of Boise; National Semiconductor is working closely with Alpha
Beta throughout California and Arizona and NCR Corporation has a half dozen
client grocery chains including A&P and Public Super Markets, as well as Marsh.

Others like National Tea Company of Chicago (515 supermarkets in the Midwest and
central United States) are going to have to be shown. "Scanning is still kind of
nebulous," shrugs John Loper, vice-president of construction. "We don't know who
is going to emerge with the best equipment." Loper thinks scanning would work
best in a new store. "lt's too expensive to install it in an existing store."
The chain is testing two electronic cash register/minicomputer systems, one in
Chicago, the other in St. Louis.

What are the Goliaths of the food retailers doing? An A&P spokesman says nothing
concrete is happening in connection with POS systems. Meantime, on the West
Coast, Oakland-based Safeway Stores is still mulling over the results of an
eight-month scanning test completed a year ago. It was installed, said a formal
company statement, "to evaluate the degree of improvement such a system can
provide in the actual operation of a supermarket."

How did it go? Replies a Safeway spokesman: "We don't have anything to say."

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