December 29, 2003Self-service Checkout Takes OverGrocery clerks' real nightmare. A good look at value proposition for self-serve checkout and its payback in real dollars. Many pickets mindful of what may be toughest obstacle in their futures By Leslie Berestein December 28, 2003
"I don't think they'll take our jobs any time soon," said a checker, Linda Trombley. "Anytime soon," shot back grocery clerk Renme Alfaro. "What about the future?" They weren't talking about the temporary workers inside, but about competition of a steelier sort. For the past several years, grocery workers throughout the United States have increasingly worked side-by-side with robots, automated self-checkout machines that, in theory at least, perform all the duties of a human checkout clerk minus the smile and the "thank you, ma'am." The grocery store cousins of ATMs and pay-at-the-pump, automated self-checkout machines come in different makes and models but generally consist of a scale, a computer screen and various built-in payment slots for ATM cards, credit cards and cash, all built into a boxy structure resembling a small checkout counter, sans clerk. Kroger, the parent company of Ralphs, has installed about 5,500 of the machines nationwide since the late 1990s. Other leading chains that have installed them include Albertsons, Publix, A&P and a host of others, including mass-merchandise retailers Wal-Mart and Kmart, and non-grocery retailers Home Depot and Walgreens. Automation in grocery stores is relatively new in California, where the technology has been embraced more slowly than in other parts of the country. Ralphs began installing the machines about two years ago, so far putting them in 30 stores throughout the state, including seven in San Diego. A few other grocery chains, including Albertsons, have installed them in a handful of stores. The machines are not any faster than human checkers. But retailers, the technology firms that make the machines and some retail industry analysts are quick to tout the many virtues of automatic self- checkout: shorter lines, more engaged shoppers and, to the dismay of grocery workers and the union that represents them, labor savings. The typical set-up for the U-Scan Express, the machines found at Ralphs, is a set of four machines overseen by one human cashier. Installing this system usually entails removing three traditional checkout counters, resulting in two fewer cashiers. "A cashier is not generating income," said Greg Buzek, president of Tennessee- based IHL Consulting Group, which helps retailers choose technology for their stores. "They are more a cost of doing business." The average grocery store in the United States must sell $15 worth of groceries per transaction to break even on labor and benefits, said Buzek. That figure jumps to around $20 per transaction in California because wages are higher. Install an automated self-checkout system for $80,000 to $90,000, the thinking goes, and once it's paid off, instead of $20 "the break-even point may drop to $12," Buzek said, resulting in savings for the retailer. Yet try to sell that logic to some grocery workers, 70,000 of whom have been walking picket lines in Southern California since October, in part because they oppose a proposed two-tier wage and benefits system that would make them costlier for their employers to maintain � and thus potentially less desirable to retain � than cheaper new hires. If low-wage workers are considered a threat, then what about robots that don't take vacations, collect overtime or need health insurance? According to the grocery workers' union, jobs have not been lost thus far because of automation. Yet more machines mean fewer job openings, said Greg Denier, spokesman for the United Food and Commercial Workers Union. "Because of turnover, it's not a matter of people being laid off, but new people are not being hired," Denier said. "Plus people have their hours restricted. That's an issue in the strike." The idea behind employing automated self-checkout machines is not to cut down on the need for employees, said Buzek, who believes that union resistance is one reason grocery automation has been slow to take root in California. Instead, he said, the idea is to deploy them elsewhere in the stores, preferably to "profit centers." These are the service- oriented areas of the store, such as the deli and the bakery, where more available staff can help move merchandise faster and boost profits. "This is what the union doesn't get," Buzek said. "They (stores) have got to move people to profit center positions. They can't compete on price. It's the only way they can survive against a Wal-Mart. Self-checkout could be the very thing that saves their jobs, not the other way around." Marketing message Nonetheless, the Canadian company that manufactures the U-Scan Express and other self-checkout models does market its machines as a labor-saving tool. "We still do market it as labor-saving because it always was and is a labor-saving item," said Leon Garfinkle, a spokesman for Montreal-based Optimal Robotics Corporation. However, "it's not something that works 24/7. There always has to be someone supervising." "I can't tell you there are no exceptions, and that in some places you don't have a loss of labor," he said. "But that's not how it is designed." Workers at the Hillcrest Ralphs recall losing one cashier to attrition after automated self-checkout was introduced, but no layoffs. In general, grocery workers are divided over whether automation is a genuine threat. Many don't think the machines are sophisticated enough to compete with human intelligence. For example, in one well-publicized mishap last fall, the U-Scans initially rejected newly issued $20 bills. "It's supposed to be perfect technology, but the system is really sensitive," said Trombley, the checker. "It goes by weight. You can't put your keys or your purse on there. It'll say 'please put your items back on the scale.' People literally scream at the machine, 'Shut up!' " There are customers who like the machines. But they also recognize their limitations. "It really helps if I am going to get just a couple of things," said Ralphs customer Tere Harris, 41, who in the past made her small purchases at more expensive convenience stores. However, "I don't think we have ever gone all the way through without having to turn to the cashier for help." Hillcrest example The need for human supervision became evident in the early days of the grocery strike, when the Hillcrest Ralphs had to temporarily shut down its automated section because employees who knew how to work the machines weren't around. According to Garfinkle, retailers' demand for new U-Scans has slowed in the past couple of years. He attributes this not to a lack of customer satisfaction but to capital spending drying up in a tight economy. "The bottom line is we haven't lost customers," he said. "No one has told us they don't like it and are un-installing it. I think it is a technology that works." Buzek predicts the industry will pick up as the economy lifts. Already, Albertsons has ordered about 4,000 new self- checkout machines from NCR Corporation, another manufacturer, with plans to install them in the coming year. In addition, potentially better technology is on the way. In some Eastern states, Stop & Shop and Jewel stores � the latter owned by Albertsons � have been testing small cart-mounted tablets and hand-held scanners with which customers can scan and bag their own items as they wheel their carts along the aisles. Both devices are manufactured by Symbol Technologies of Holtsville, N.Y. Customers receive extra discounts for using them, with special deals popping up on their screens that customers who stand in checkers' lines have no access to. Denier, of the grocery union, finds the idea of consumers being rewarded for taking on additional work ridiculous. "Pretty soon they (the stores) are going to tell customers, 'For your convenience, we are going to let you unload the trucks,' " he said. "It really reflects a negative trend in society where we eliminate service from society altogether." Symbol Technologies does not market their self-scanners as a labor-saving device, but the implications are obvious to grocery employees. With the use of self- checkout machines already widespread and additional technology in the testing phase, the handwriting is on the wall as far as some grocery employees are concerned. "These will take jobs, just like ATMs took tellers' jobs," said Sabrina Ruiz, a striking Ralphs checker. "I just feel like we are all going to be extinct." Leslie Berestein: (619) 293-1542; [email protected] Posted by Craig at December 29, 2003 05:30 PM |