Giant Food Inc. threw out its last cash register yesterday, symbolically ending a four-year, $25 million check-out computerization program and beginning a new era for the supermarket industry.
By replacing the cash registers in its Laurel store with IBM units that "read" food package labels with lasers, Giant became the nation's first major food chain to eliminate conventional check-outs.
In the process, Giant also eliminated consumer activists' opposition to automated check-outs that once threatened to scuttle the food industry's switch to computers.
When the first computer check-out was installed in a Giant store in 1973, consumer groups protested because the chain stopped marking prices on individual items.
Complaints that consumers could not tell how much an item cost because prices marked on the shelves were often wrong led to legislation in nearly a dizen states requiring price marking.
Experiments with scanners in supermarkets slowed dramatically as a result, and some industry analysts predicted computer check-outs would never become popular unless chains could save money by eliminating price marking.
Less than a year after its first computerized store opened, Giant put prices back on its packages and announced they would stay there so long as consumers demanded them.
"I take them at their word on that," Ellen Haas, president of the Consumer Federation of America, commented yesterday, "It's a resolved issue."
Resolution of that issue by a supermarket chain based conspicuously in the nation's capital set the pattern for the whole industry. Today the vast majority of chains using scanners still mark prices on items, said Robert Dobkin of the Food Marketing Institute.
Giant's decision to put scanners in all its stores despite the setback on eliminating item pricing also led other supermarkets into computer checkouts, added Dobkin.
"The supermarket industry has made a decision," he said. "The experience of Giant and a couple of others has shown scanners can pay for themselves in three years."
FMI statistics show nearly 900 supermarkets now have scanners, and the number is growing by about 100 stores a month. The limiting factor, Dobkin added, is the ability of manufacturers to produce the scanners. NCR Corp. and IBM dominate the market, accounting for more than 80 percent of the installations.
Giant's IBM scanner system cost between $200,00 and $250,000 per store to install, about half of that for the laster checkout machines and computers, the rest in related remodeling costs, said Donald R. Buchanan, vice president for data processing.
The laser reads the familiar striped Universal Product Code from each item, and the computer prints the items price on the sales slip.
Because consumers apparently like scanners, Giant sales increase when stores are converted from conventional checkouts, Buchanan said. He said scanners "have to be a factor" in Giant's recent move past Safeway into the number one spot in the Washington market, with 31 percent of the business compared to Safeway's 26 percent.
The machines, he added, have also helped increase Giant's productivity -- sales per employee -- by about 2 percent per year. The company's contracts with Local 400 of the Retail Store Employes Union forbid laying off workers because of automation, but the number of clerks has declined as old jobs go unfilled.
Reducing the time to check out each order by 16 percent, scanners have allowed Giant to eliminate one or two checklanes from some stores, a source of minor complaints from Haas and other consumer groups.
Buchanan said the major advantage to scanners is the detailed sales information that they provide. Every day Giant headquarters gets a computerized list of how much of every item was sold by every store.
The next step, Buchanan said, will be to use that information to "fine tune" inventories in each store, allowing Giant to save money by reducing the amount of slow-selling merchandise in stock.
The company is already experimenting with automated re-ordering on staple items. The computer will check the store's sales of, say, corn flakes, and automatically order more from the company's warehouse when the store runs short, Buchanan explained.
Giant paid cash for its $25 million computer system, financing it with operating capital. Company officials said it is still unclear how the purchases will effect the chain's profits.