Members of the Senate Economic Affairs Committee were surprised -- and not pleased -- to receive invitations last fall to visit a new Giant Food store in Clinton. There, they discovered that items were not being individually priced. Instead, a computer at the checkout counter scanned a label code, compiling each price into a total bill.
The Maryland state legislators were not happy about the change because they did not know about it beforehand. Two years ago, then-Giant Food president Joseph Danzansky promised to consult with the committee before elminating individual pricing. He hoped to prevent legislators from enacting a mandatory price marking bill. With 126 stores in the Washington area, and a leader in food retailing innovations, the bill would have made a huge impact on Giant Food Inc.
Danzansky died in 1979, however, and the new executives stopped stamping cans in four stores -- one each in Clinton and Waldorf and two in Baltimore. Safeway opened its first store without item pricing in Waldorf last month.
David Rutstein, vice president and general counsul of Giant Food, said "Those of us handling the matter now failed to communicate with the committee (about changing the pricing system). We regret we failed to do this."
Senators made their displeasure known by introducing a bill that would require price tags or labels to be attached to all consumer items sold in the state. The bill, which has not yet been voted on, brought Giant representatives back before the committee.
Giant says the new pricing system is labor-saving and will moderate food cost increases.
But consumer groups counter that unless there are substantial savings for shoppers, price stamps should not come off. Individual pricing helps shoppers keep track of their grocery costs while in the store, and to remember and compare those prices later when the cans and boxes are sitting on their kitchen shelves.
"Yesterday I heard an ad from Giant Food -- 'Being informed is the best way to beat inflation.' Now to me this is contradictory," said Sen. Arthur Dorman (D-Prince George's), one of the bill's sponsors.
He cited as an example his wife's purchase of an apple Danish cake marked down to $1.43 but that was picked up by the checkout scanner as $1.59, the original price.
"Many people are shopping on limited income and pricing does help. I believe it's a protection we've got to give to the consumer," said Sen. Norman R. Stone Jr. (D-Baltimore County), who is cosponsoring the bill with Dorman.
Giant representatives said that by removing item pricing they will be able to moderate price increases.
"With the cost of food predicted to increase 12 to 15 percent this year due to factors beyond our control, anything that we can do in areas where we can control cost, we have a responsibility to the consumer to try to help to do it more efficiently," said Rutstein.
"There are ample laws and punishments on the books today for consumers," said John J. Briscoe, an attorney representing Giant. "This bill amounts to a punishment to an industry which is trying to improve its efficiency and production."
Briscoe told the committee there were some "misconceptions" about the move from stamping to scanning.
"Giant Food and other retailers who are contemplating price scanning never said they were trying to save consumers money," he said. "They said they were trying to improve productivity and make themselves more efficient.
"It is reasonable to expect some savings to trickle down. But are we telling companies that they must prove they will save consumers money in order to be allowed to innovate?"
Senators on the committee had requested dollar figures on saving consumers could expect if item pricing were discontinued in supermarkets.
Giant said it could not isolate cost savings. "We've seen certain efficiencies. Like all other innovations in food retailing, the customer will benefit," said Rutstein.
Dorman said he was in an awkward position in support of the bill when no unions were fighting for the legislation.
"Why are the retail clerks not here this year?" he asked. "That really disappoints me." Last fall when the senators visited the Clinton store, members of Local 400 of the United Food and Commercial Workers picketed outside the store. No representatives of the union appeared at the committee hearing.
A spokesman for Local 400 said the union had taken no position on the bill because Giant had not been able to prove there would be significant labor savings, and therefore no job losses, if clerks no longer stamped cans.
But the president of Maryland State and District of Columbia AFL-CIO submitted written testimony to the committee in favor of the bill. "Our position is in support of the consumer," said Tom Bradley. "All our workers are consumers."
He said that item pricing particularly helps senior citizens. "Their eyes are bad and they may not be able to read the shelf price. They think they are getting $60 worth of groceries and they end up with $80 worth.
"It almost breaks your heart when they're standing at their basket and trying to figure out what to put back. I shop with my wife every week and I've seen that happen," he said.