In an experiment that could revolutionize supermarket shopping, Giant Food Inc. yesterday announced it will stop marking prices on most items in its stores.
The decision to end item pricing will cut operating costs and make possible lower prices, Giant claimed in weekend newspaper ads. In another cost-cutting step, the chain's 126 stores will stop selling soft drinks in returnable bottles.
Giant, which had sales of almost $1.5 billion last year and is the dominant food retailer in the Baltimore-Washington market, is believed to be the first major supermarket chain in the United States to try to do away with item pricing.
Giant was the nation's first food chain to equip all stores with automatic scanning registers that "read" the identity and price of each item from a coded stripe, making it possible to stop stamping the price on every can, bottle and box.
If Giant's decision to do away with individual item pricing does not set off a consumer backlash, it could open the way for the rest of the supermarket industry to adopt the practice. Consumer preference for Giant's scanners increased Giant sales significantly, forcing local competitors to invest in the machines and spurring the spread of the technology across the country.
"The success of this program depends entirely on consumer acceptance," Giant spokesman Barry Scheer said yesterday."We don't believe the price marking of individual items is a big issue. The real issue is whether there is adequate information at point of purchase for consumers to make an intelligent decision."
He said Giant will improve shelf signs showing prices and will guarantee their accuracy. If the scanned price is more than the shelf price, its ads proclaimed, the buyer gets one of the items free.
Shoppers in Giant stores yesterday had few complaints about the system, and not many took the store up on its offer of a grease pencil to mark prices themselves.
"I prefer unit pricing" on the item, said Barbara Julian, who was shopping at Lee Highway and Spout Run in Arlington. Looking for prices on the shelves "slows down shopping just a little," she added, "but as long as the price is there on the shelves it's all right."
Scanners ring up groceries by using lasers or lights to read the black and white striped Universal Product Code on each package. The UPC bars identify the item, then a computer looks up the price and prints it on the register tape along with a description of the item.
Consumer activists have complained that the next step, after scanners, would be to end price marking, making it more difficult for consumers to comparison-shop. Until now opposition from consumer groups and food store employe unions has kept prices on packages.
Giant's current contracts with Local 400 of the Retail Store Workers Union guarantee that no union member will lose a job because of automation or elimination of price marking.
Last month the Maryland legislature killed a bill that would have required all stores to mark prices on items. Giant lobbied against the measure as it had earlier worked to defeat bills banning nonreturnable bottles and cans.
Giant's decision to drop item pricing was based on the success of four experimental stores the chain opened last fall to compete with such discount food outlets as A&P's Plus stores and Grand Union's Basics. Like the food warehouses, the Giant test stores have limited selections, lower prices and no prices marked on individual items.
When those stores opened, Giant chairman Israel Cohen called price marking, "a tremendous labor cost that adds nothing to the intrinsic value of the item," adding, "We've got to convince the shopper that it's not necessary."
Spokesman Scheer said Giant will not immediately stop marking prices on all items, but in four to eight weeks, prices will come off most things.
The process started yesterday with between 1,500 and 2,000 items on which Giant is advertising "warehouse prices" and will be expanded as new stock flows into the stores. Effective immediately, Giant will no longer remark the shelf stock when the price goes up or down.
To make it easier for customers to see prices, Giant will put larger price labels on some of its shelves. New signs, facing upward, will be added to the lowest shelves, because consumers complained they could not read the old-style shelf strips at shoetop level.