Supermarkets Lead the Way In Scan Price Accuracy

Frozen Food Digest, Feb, 1999

Food retailers have the highest rate of price accuracy among all retail groups, says the Federal Trade Commission (FTC). Their record of 97% accuracy is even higher than it was just two years ago.

"Price accuracy is the highest priority for the retail food industry and this report clearly shows that supermarkets are doing a good job at price marking accuracy in a scanning environment," said Tim Hammonds, president and CEO of Food Marketing Institute (FMI), a trade association for the supermarket industry. "Accurate pricing is critical to maintaining consumers' trust. That is why FMI has worked with the National Institute of Standards and Technology (NIST) and the National Conference on Weights and Measures (NCWM) to develop recommended price verification procedures that work in all types of retail outlets."

"The retail food industry works every day to earn and maintain consumer confidence, and providing consumers with accurate pricing at the front end is a significant part of that commitment," said Thomas K. Zaucha, president and CEO of the National Grocers Association (N.G.A.).

Inadvertent discrepancies between the register price and the shelf price are caused by human error. Striving for 100% accuracy, supermarkets continue to develop programs that limit the possibility of errors.

The price verification system developed by retailers and government has two important components: making sure the shelf price matches the register price and compensating or rewarding the consumer for pointing out discrepancies between the shelf price and the register price. Supermarkets welcome customers pointing out to the store management any pricing discrepancies they find. That allows stores to audit what went wrong and correct it.

Some opponents of scan technology have suggested item pricing as a better alternative; but marking a price on every item will not improve the pricing system. Supermarkets today carry 35,000 to 50,000 items. If only 10 of each item were on the shelf, there would be between 350,000 and 500,000 individual packages, bottles and cans. Individual price marking provides many more opportunities for human error; and without the scanner and the register receipt tape, customers do not have the opportunity to verify price accuracy.

One of the benefits of scanning is that it allows supermarkets to put more items on sale. Over the 15 years that scanning has been in place, supermarkets have offered more specials. The labor savings from not having to mark prices on each item have helped supermarkets control food costs.

The Food Marketing Institute (FMI) is a nonprofit association conducting programs in research, education, industry relations and public affairs on behalf of its 1,500 members including their subsidiaries -- food retailers and wholesalers and their customers in the United States and around the world. FMI's domestic member companies operate approximately 21,000 retail food stores with a combined annual sales volume of $220 billion -- more than half of all grocery store sales in the United States. FMI's retail membership is composed of large multi-store chains, small regional firms and independent supermarkets. Its international membership includes 200 members from 60 countries.

N.G.A. is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. This industry segment accounts for almost half of all food sale stores in the United States. N.G.A. members include retail and wholesale grocers and their state associations, as well as manufacturers and service suppliers.