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11-17-1980 Hearing on Item Pricing Assembly Labor, Employment, and Consumer Affairs Committee
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Recommended Citation Assembly Labor, Employment, and Consumer Affairs Committee, "Hearing on Item Pricing" (1980). California Assembly. Paper 239. http://digitalcommons.law.ggu.edu/caldocs_assembly/239
This Hearing is brought to you for free and open access by the California Documents at GGU Law Digital Commons. It has been accepted for inclusion in California Assembly by an authorized administrator of GGU Law Digital Commons. For more information, please contact [email protected]. ASSEMBLY LABOR, EMPLOYMENT, AND CONSUMER AFFAIRS COMMITTEE
HEARING ON
ITEM PRICING
San Diego, California November 17, 1980
Bill Lockyer, Chairman Dave Elder Alister McAlister Jim Ellis Dave Stirling Gerald N. Felando Sally Tanner jack Fenton Maxine Waters Elihu M. Harris Phillip D. Wyman J. Robert Hayes Bruce Young
Consultants Greg Schmidt Steve Holloway Maria Husum, Committee Secretary
No. 871 TABLE OF CONTENTS
Witnesses
Chairman Bill Lockyer Opening Remarks ' Lynn Morris ...... 2 Executive Secretary state consumer Advisory council
Steve Fishbein ...... 4 Legislative coordinator Department of Consumer Affairs
Lucy Killea ...... 6 councilwoman, City of San Diego
Harriett \-17 icder ...... 8 Supervisor, Orange county
Kathi Hamilton ...... 12 Director of consumer Affairs county of stanislaus
Kathie Klass ...... l9 consumer coordinator santa cruz county consumer Affairs
Le s Howe ...... 2 3 California Retailers Association
Steve Koff ...... 34 public Affairs coordinator certified Grocers of california
Don Beaver ...... 3 8 Executive Vice President california Grocers Association
Dave McMahon ...... 4 7 Albertson's, Southern California Division
Adrienne Gaines ...... 54 Director of publ~c Relations Stater Bros. Markets Shirlee Earley ...... 59 consumer cancer~ chairman california Federated women's clubs
Pat Blow ...... 6 7 Director, Consumer League in Orange co.
Sherry Baum ...... 69 Director of the consumer coalition Orange county
Ken Stewart ...... 7 3 Director of Membership Services Retail Clerks
Dave Woods ...... 77 Programmer Analyst
Mary so low ...... 9 0 President consumer Federation of California
Jerry Lench ...... 94 Southwestern States council
Barbara Friedman ...... 9 5 Consumer Representative Retail Clerks Union #770
susan woods ...... 97 Consumer Affairs Director California Public Interest Research Group San Diego
Jim Bartell ...... 103 .epresenting San Diego county Supervisor Jim Bates
ii APPENDIX
A
tachment A of Supervisor Wieder's Statement Attachment B of Supervisor Wieder's Stat
X B
t A of Les Howe's Statement t B of Les Howe's Statement c of Les Howe's Statement D of Les Howe's Statement
APPENDIX C
r Goldinger, Director Los Angeles County t of Consumer Affairs
lll ASSEMBLY INTERIM HEARING ITEM PRICING NOVEMBER 17, 1980 SAN DIEGO
CHAIRMAN BILL LOCKYER: Welcome. We're pleased to have you all with us. Good morning my name is Bill Lockyer from Alameda
County and I chair the Assembly Committee on Labor, Employment and Consumer Affairs. I'd like to introduce to you two members: one member of the Committee and one who is here because it's his special interest and then we expect to have other members of the Labor Committee joining us as they work out their transportation problems this morning. We'll expect further participation later. First of all from Los Angeles-Hollywood area--the gentle- man who introduced the bill that we're partially dealing with today to continue item pricing, Assemblyman Herschel Rosenthal on your far right. Herschel is a member of the Rules Committee in our house, one of the influencial fellows who of course, has a deep interest in this particular subject matter. Next to him is Assemblyman Jim Ellis, now Senator Elect Jim Ellis, from the area in which we're • currently meeting--San Diego . I guess the whole time Jim was ln th scmbly he was on the Labor, Employment Committee and has been one of the hard working thoroughly prepared, energetic members who is
now boo1no b to bring some of his talent to the State Senate.
We'd 1 ike to begin. I guess the first person to testi is Lynn Morris from the State Consumer Advisory Council and also Steve Fishbein from the Department of Consumer fairs. Lynn, good morning. Our procedure is to ask people to sign 1n when they're testifying so we have a complete record of names and addresses in case we miss anyone. You'll see an agenda at the front and we have sort of an overview from the Department and the Advisory Council and local government participation, comments from the industry and public testimony that deals just with the technology we're talking about, labor and any members of the public, a variety of consumer groups and so on that wish to speak. LYNN MORRIS: I almost feel I don't need to speak with all the words in picture today. Good morning, my name is Lynn Morris and I'm the executive secretary of the State Consumer Advisory Council. The council is an advisory committee appointed by the Governor, statutorilly mandated to make recommendations on consumer concerns. Item pricing has certainly become one of those concerns. The council believes the best way to represent consumers is to listen to what they have to say. We've spent the past year holding public comment periods in major cities throughout California. We've spent endless hours surveying and meeting with business, labor, community and public interest organizations. We have solicited consumer concerns from local government officials and city and county complaint assistance programs. The major concern which has been expressed loud and clear 1s the need for tools to deal with the rising cost of inflation. We've heard it all over the state. Item pricing and the awareness that comparative shopping provides are such tools. There are no guarantees that the removal of prices will result in any savings being passed on to consumers. Consumers want items in a supermarket
- 2 - to be lear and indivi ally price marked. y want to see the pr ce of the item at the time of selection, at the time of sale, and n t home for price verification c ar1 on. Most sh pers seem to be pleased with the electronic scanners especially w t tail receipts that they provi Th arc not opposed to technological advancement.
As you know, local item pricing o inane s have been passed
in 57 cities and 15 counties throughout California as is evidenced on the map before you. This has been a desperate attempt on the part of citizens within the community to retain the long-time
protection that item pricing has provided. Local government officials have responded overwhelmingly to the desires of eir constituents. Local ordinances, however, are not the answer. Many of them are
technically different, details of which will later be pointed out to you. 'fhey do not provide uniform protection. It's confusing for both consumers and the indust to deal wi this ate ork quilt type of regulation. Local ordinances are also much easier to peel off and become weakened exemptions. is has alre y begun to
h en in several y Area cities and someone 1 ter w 11 address h t point today . • Industry at one time also t lea t ecogn z d the ne d
for item pricing. Early in 19 4 en che k st scanni g firs became operational 1n supermarkets In Nor America, the grace
indust 's own ad hoc committee on the universal pro ct code recog ni ed that the possibility of the removal o item pr1c1ng 1n some stores h d produced consider lc debate amon all inte ested pa tie ey established a p li policy subcommittee to serve as a forum for
3 - discussing the issue. In order to gather necessary facts on the effects of price removal on consumers, the subcommittee sponsored a major research project which was conducted by researchers at Michigan State University and the University of Vermont. The results indicated clearly that shoppers in what they called "prices-off stores'' did experience a measurable reduction in price awareness and consciousness compared to shoppers 1n conventional stores. The public policy subcommittee recommended to the industry at that time that scanner stores follow the same traditional approach to individual item price marking as was done 1n conventional stores. Obviously, you're going to hear many arguments on both sides of the issue today, but it's important for you to remember that this is a public versus special interest issue. Consumers, all sizes and shapes, have spoken out in their local governments around the state not only asking for immediate local ordinances to maintain item pricing, but at the same time endorsing the need for a state law. We are not asking for radical changes, we are not asking for excess government regulation. Consumers have the fresh new spirit of conservatism. We want to maintain the old traditional way of com paring prices and shopping with awareness. Thank you. CHAIRMAN LOCKYER: Mr. Fishbein.
STEVEN Fl~HBEIN: Chairman Lockyer, Assemblyman Rosenthal, Senator Ellis, my name is Steve Fishbein. I am the Legislative Coordinator with the Department of Consumer Affairs. We've circulated a statement for the record and it's available and it's brief. The lJepartment continues to support uniform item pricing 1n California. Simply put, item pricing has always been a very basic component of the retail market place. As we all know, consumer resistance to item pricing's proposed elimination has been great. This is evidenced by the recently enacted o inances 1n 57 California cities and 15 counties. I might also add that I haven't seen too much consumer and public activism as I've sen here tod on too many consumer issues in Sacramento. Today's inflationary economic environment, 1n which up to one-third of a household budget may be allotted for food pur chases, necessitates that price information be available to the consumer at the time of selection . Item pricing facilitates the • comparison shopping, provides an opportunity for price verification at checkout, and allows consumers to continue their price awareness at home which is very important too. Such price awareness is a key aspect of· good shopper behavior. In addition, consumer pr1ce awareness is crucial to an unfettered and free functioning market place. Item pr1c1ng proponents should not be viewed as anti-tech- nological. Our Department has continually s ort d item pr1c1ng and we've also stated it's very compatible with omputer scanning and the Universal Product Code. In fact, we laud technological advances and encourage their growth in building more efficient economy. !Iowever, one difficulty with total reliance on superma ket
computerization, without any item pricing, is that an environment could be created which is more conducive to fre nt ard repricing of items. Repricing is alre y a common practice wh h consumers complain to us about very frequent In fact, legis] tion has been brought before this Legislature regard g pr lems a so
elated with re-pricing and remarking.
- 5 We have recently met with the California Association of Retailers and are open to a continuing dialogue in this area. At the same time, we maintain our position that retail item pricing is a vital tool for the public to adequately contend with continually escalating prices. We feel it would be unwise to eliminate essential price information without any compensating benefit to the public. Thank you very much. CHAIRMAN LOCKYER: Question? Thanks Steve. Okay, we have some people from local government and also Consumer Affairs officers who are going to speak next and I guess partly because we are visitors in her city, it is appropriate that we start with Council woman Killea from the San Diego City Council. COUNCILWOMAN LUCY KILLEA: Thank you, Mr. Chairman, Committee members. I appreciate this opportunity to speak to you. l sponsored a city ordinance last spring to retain item pricing and that ordinance did pass. We Jo have some ~rovisions in that; however, it does have a sunset provision which has only a year's life unless we can renew it with the hope that there wotild be legislation at the state level and to relieve us of that responsi bility, we feel it should be at the state level. The other provision was that the major chains would be allowed to have one demonstration store available to indicate how they could operate with the automated pricing without item pricing. None have chosen to take advantage of that yet so we have no comparison locally. We had thought this might give us an opportunity to give a comparison on it.
~eedless to say, the consumers, individuals, and organized groups in San Diego are very much in favor of our retaining the ordinance
- 6 - and do hope that state legislation will eventually replace it. Thank you. CHAIRMAN LOCKYER: Your ordinance runs until when?
COUNCILWOMAN KILLEA: I think it would be next summer. ASSB1BLYMAN .TIM ELLIS: Lucy, you said we don't have a store in San Diego. COUNCILWOMAN KILLEA: We have none that have been with the scanners without the item pricing. No we have none. I ASSEMBLYMAN ELLIS: Do we have scanners at all? COUNCILWOl\1AN KILLEA: In the county. I'm not sure whether they're in the city or not. There are some. ASSEMBLYMAN ELLIS: What about the price club? They have a really different setup. Does your ordinance cover them? COUNCILWOMAN KILLEA: That 1s a club and that might make a difference. I'm not sure. I'd have to check with our city people
and see the details of it. But that 1s a different kind of thing; in other words, it's a membership kind of thing and that may make a difference on it. I don't know.
ASSEMBLYMAN ELLIS: You're not sure if the ordinance covers them? COUNCILWOMAN KILLEA: l think it would not because of their status as a club. That's my understanding. CHAIRl\IAN LOCKYER: Thank you very much. :.Jext is Harriett
Wieder who's been most active in this effort in ~oth her county, Orange County, ;n which she is a supervisor and in other parts of
the state. I think you have a number of friends who came along today. SUPERVISOR HARRIETT WIEDER: Yes, I'll identify them. Thank
- 7 you Mr. Lockyer. Mr. Chairman and honorable committee members, my name is Harriett Wieder and I'm Supervisor in Orange County. I am here today to express our county's formal position in support of AB 2174.
I have been joined today by about 200 other concerned consumers from Orange County and 50 private automobiles and four buses that brought them here who have made this trip to San Diego to add their voices to mine in favor of a statewide mandate for item pricing of grocery goods.
Although there are almost 2 million people living 1n Orange County today, I can assure you that those who have traveled with me here are a most representative sample of the way Orange County residents feel about this 1ssue. I say this with confidence because twice this year the Orange County Board of Supervisors has held public hearings and before adopting an ordinance mandating it on item pricing at those hearings, we made sure that we got the public input and that public response in favor of item pricing was very overwhelming. But significantly there was no opposition voiced by consumers. Most revealing of all, is an opinion survey conducted state wide in September of 1979 by Public Response Associates, Inc. of San francisco. They concluded that 76% of those responding from around the state felt item pricing was very important. In the l.os Angeles/ Orange County area, the response was 77% in support of item pricing. Who are these people who favor item pricing? Let me enumerate: They are senior citizens and physically disabled persons who have difficulty or are unable to read the prices marked on high
- 8 - or low shelves; they are grocery shoppers of all types who are entitled to know the price of the goods they are buying when they are standing at the checkout counters. Without item pricing, we are at the mercy of the scanner, with no way of knowing if we are being fairly charged at that point of purchase.
Now is this concern only imagined? Once again, I need only to turn to the hundreds of persons who have signed petitions and spoken out at city councils and at boards of supervisors meetings with specific complaints and evidence of being overcharged. But there's even more compelling evidence. In a recent packaging industry newsletter named ol Technolo ies, experts in the Universal
Product Code Technology estimated, and this is significant, that as many as 10% of the goods imprinted with those little black lines do not scan properly. The newsletter stated that the Universal Product
Code could be a financial "deathtrap" for packaging companies if high imprint quality standards are not observed. In view of this un certainty about the electronic scanning system by the industry experts themselves, is it reasonable and is it fair for major markets to remove prices from their goods?
Finally, the supporters of item pr1c1ng are those who reflect with insight about how our economy works. We are told that by letting scanners do the work and by not pricing goods individually, fewer grocery workers will be needed and, therefore, grocery stores will be able to lower their prices. How often have we heard that?
'fhe thoughtful person, though, who does understand our free market system, and l want to tell you the shopper, the consumer, and the homemaker is the best economist around, knows that the most reliable
- 9 - way to lower prices 1s to strengthen competition. Without item pricing, comparative shopping between commodity brands is seriously hampered, because the buyer must rely on his or her memory in order to compare prices between brands on one end of a long aisle and another. For someone buying a full basket of groceries, it is extremely inconvenient to he running up and down the aisles to compare prices, assuming that they are accur ately marked on the shelves in the first place. Every elementary economics textbook that l know of indicates that one of the requirements of a freely competitive economy is that consumers have as much knowledge as possible about the quality and price of the goods they purchase. This would seem to compel item pricing. Now, why must there be a statewide, rather than merely a local legislation mandating item pricing? This is why I'm here before you now.
As I mentioned earlier, the Orange County Board of Super
Vlsors has adopted its own item pricing ordinance, with a sunset clause, which protects consumers in our unincorporated communities, which in terms of population, you would want to know constitutes about 30% of the county. However, out of the 26 cities within our boundaries, only 8 cities have passed their rwn item pricing ordin ances to date while several other cities are presently considering such measures. Now, this is ·1 great drain on the time of local municipal-elected officials and local Qovernment staff and more costly because, quite simply, the need ror item pricing does not vary one jurisdiction throughout the state to another. Shoppers are the same
- 10 - from Modoc County to San Diego County: we all want to know the price of the goods we are buying when we are at the checkout stand. Eventually, I am sure, item pricing ordinances will be adopted by almost all cities and counties in the State, but that may take years and a great deal of cost to the consumer and the taxpayer. It should be clear to everyone that the vast majority of consumers want it now. To conclude, let me make a final comment on the vast groundswell of support for state item pricing legislation. This great display of support is in itself a justification for AB 2174, for it evidences a traditional American principal that we, as elected officials cannot ignore: that the will of the majority must be the paramount criterion affecting our decision-making. Thank you, Mr. Chairman and honorable Committee members for this opportunity you've given us to express our point of view and In case you've missed a word I have some copies of my remarks. CIIAIRMAN LOCKYER: Harriett, what is the duration of your ordinance in the county? SUPERVISOR WIEDER: The spring of '81. CHAIRMAN LOCKYER: Okay, thank you. ASSEMBLYMAN ELLIS: Did your testimony include whether or not you're taking a position on the scanner itself or is it simply the item? You don't care how they total it up as long as it has the price on each item, is that correct? SUPERVISOR WIEDER: No, Assemblyman, State Senator Elect.
I think the scanner is the best thing since sliced bread. I don't want to do away with it, but don't take anything away from me either.
- 11 - ASSEMBL Yl\1AN ELLIS: So, the scanner's Okay? SUPERVISOR WIEDER: The scanner's fine. The scanner 1s probably a very efficient way for the industry to run it's operation, but why take away from me for that reason? I'm just delighted that they're getting so efficient. CHAIRMAN LOCKYER: Kathi Hamilton from the Stanislaus County Consumer Affairs Office. MS. KATHI HAMILTON: Good morning Mr. Chairman and members of the Committee and staff. I'm Kathleen Hamilton, Director of Consumer Affairs for Stanislaus County. I'm also here this morning representing the California Consumer Affairs Association which is the statewide affiliation of the local consumer protection agencies in California. As you've already heard this morning, perhaps the most significant outcry from consumers this past year has been the clear demand for protection of a most fundamental consumer right the right to know the price of merchandise we want to purchase. The creativity and energy of real people in over 60 counties and cities has produced a host of local ordinances, which represent the unde niable will and preference of consumers. Further tests and studies are simply not necessary to determine public preference on this issue. The public wants item pricing, and in the absence of state response to that need, they've gone to the extraordinary and unusual length of ratifying local ordinances. And while these local ordinances have become critical cornerstones of this important consumer right to know cost, local government continues to feel that this kind of protection most properly belongs with the State. It seems appropriate that retailers be subject to a uniform item pricing regulation, and
12 - further, it's appropriate that all consumers in this state be accorded equal protection. The need for uniformity 1s one very
relevent issue before you here today. The array of local ordinances that have been adopted are not identical and offer a wide range of strengths and weaknesses. This lack of uniformity serves neither the industry nor the consuming public as well as it might. Speci fically, the key differences between these local ordinances fall in- to some particular categories. Some of them have expiration dates, some I of them do not. You've heard that San Diego and Orange County
ordinances have expiration dates; so does the Los Angeles City ordinance and the Los Angeles County ordinance. ln most cases, we're looking for expiration of these local ordinances within the next few
months. And in those counties such as the one I represent, Stan islaus County, where we don't have an expiration date, there still ltas been a very clear message from the Board of Supervisors that they're in the business of item pricing protection only until the State steps
back in. They don't perceive this as their primary role. Another
key difference between some of the ordinances has to do with exemp tions that have been allowed. The San Francisco County ordinance has been used as a model ordinance before most of the local municipalities considering these nrdinances. That ordinance did not include an exemption for end-of-aisle sale items and because that ordinance was used as a model 1n many communities, many of the subsequent local cottnt ordinances also do not include that exemption for sale items. Stan islaus County docs not exempt sale items from its item pricing requirement. The other type of exemption that is provided for in many of these local ordinances has to do with specific stores which arc
- 13 - not required to item price merchandise even if they have scanners, and these vary. Los Angeles County allowed one exemption, one store in the unincorporated area of the county and the Department of Consumer Affairs there has been asked to monitor that particular experiment. The question of who monitors these exemptions is another key Issue we have to consider. Having previously been employed with the Los Angeles County Department of Consumer Affairs, I know that they lack adequate staff and resources to do the kind of monitoring job that we really need to see done to analyze the practical exper ience with that exemption. Los Angeles City has allowed 15 exemptions, one in each council district. The City of Oakland took another approach. They've allowed stores that will sell at 20% below the price in anot11er store to not item price, even if they're using scanners. Again, we've got a real serious question: Who's monitoring that; who's doing the price comparison; and who's going to go In and say ''You're not selling 20% below; get the prices back on those packages?'' Orange County also allowed an exemption for stores. Each store owner is allowed to exempt one of their stores from item pricing. I'm not sure what the provisions are for monitoring that experiment. So we have a wide range of exemptions that have been allowed to exist. I think there's a real key issue in something to look at with regard to the issue of allowing stores to sell below comparable market price to be exempted from the ordinance because one of industry's favorite arguments for item pricing is that they want to get the price of food down to protect consumers and so they're promoting a no frills kind of supermarket experience. ['d like you to know that consumers in California support a no frills shopping
- 14 - alternative and we support the scanning equipment. We don't con sider price information a frill. Stores that want to offer that kind of frill-less shopping can give you opportunities to bag your own groceries, they can have you shop out of cartons, they can take this food barn approach, but we'd still like to see the prices on those goods.
One of the other differences between the local ordinances, and it differs from the state's previous law, has to do with penalties. The state law originally provided for civil sanctions for violations of the item pricing law. Most of the local ordinances no~ provide for minor criminal violations ranging from various infractions to various misdemeanors with the more stringent possibilities for violators incurring a $500 misdemeanor fine and six months in jail. The Los Angeles City ordinance, it's my understanding, actually allows alternatives to item pricing. They haven't actually said, "You've got to have item pricing." They've said, "You have to have item pricing or shelf pricing and/ or provide consumers with the tools to mark their own prices.'' T think you've got to understand those distinctions between the ordinances because what it means IS that we really don't have item pricing throughout the state and what we're still looking for is a good strong, solid uniform statute. In my community in Stanislaus County, we have a situation which is going to be repeated. The county has adopted an item pricing ordinance, but the major city 1n our county, Modesto, where we have the only store with a scanner 1n the county, has declined to adopt an ordinance up to this point. They'll be considering it within the next couple of weeks, but because they're coming at the
- 1 s - tail end of this proliferation of ordinances they're subject to a great deal of pressure and it's questionable whether or not consumers in the City of Modesto are going to be protected the way consumers that shop in the unincorporated areas of my county will be. Okay, you've heard, and you're going to hear today, the essential argu ments in favor of retaining item pricing, the inadequacy of shelf pricing, the consumer's inability to comparison shop within a store if they don't have item pricing, and the consumer's inability to combat a potential computer error when they check out at the check stand. I'd like to ra1se some other issues which you may not hear addressed today. I think we need to look at the abyss that will he created in the supermarket if we don't have an item pricing statute; what are the alternatives to item pricing if we're not going to get an item pricing statute and what car we really expect industry to do if we don't impose an item pricing requirement? Industry has said they'll shelf pr1ce. They've said that consumers can rely on shelf pricing. Computer use and scanner use in the stores will create a situation where retailers will potentially be able to raise the price of grocery commodities within a matter of seconds within the store. Does this mean that consumers will be subjected to repeated and frequent pr1ce increases and how are we going to respond to that practical realtiy? How are the shelf prices going to reflect those changes if we don't look at legislation in those areas in consort with item pricing. Do we have a situation where industry's go1ng
to say they'll shelf price, but in fact they're going to be ra1s1noh
- 16 prices that the computer will pick. But who's go1ng to change the shelf prices? Consumers will still be picking up items off the shelf that may not reflect the price that the computer's going to pick up.
I think there's another question we really want to look at and that is why has the Grocer's Association and the Supermarket Retail Industry been so doggedly opposed to something as fundamental and fair as item pricing? I would like to suggest to you that the reason is that if they item price, it cuts into their profits, and it's that simple.
The Legislative Analyst for the State did a report a couple years ago analyzing the practical impact of item pricing versus not item pricing. That Legislative Analyst report states the most noticeable benefit of the scanning technology may not be so n1uch its potential to reduce consumer food prices significantly as its poten tial to raise the Retail Food Industry's return on equity. The Federal Trade Commission reports that the food retailers rate of return has been 50% higher than other retailers, 20% higher than food manufacturers, and about 13% higher than all other categories of manufacturers. The Joint Economic Committee of Congress estimated that supermarkets overcharged customers by more than $660 million in 1974 because consumers were forced to shop where a few markets had monopolistic control. These points are salient, I believe, because they demonstrate the Industry's dedication to profit thei inattention to public interest, and they lend credence to the distrust and fear felt by consumers when they're asked to blindly trust the industry to continue to protect their pocketbooks.
- 1 7 - I think that we also want to look at what the Industry has done throughout the course of this discussion. Mr. Jan Charles Gray of Ralph's, who you'll be hearing from later, has made various points at various times which aren't consistent. At the Weights and Measures Convention last summer, he said we want the free enter prise system to operate here; we want the freedom to let consumers choose; we'll keep the prices on and yet we want the freedom to take them off if we want to. Well, when pressed at that conference, he was asked, "What is Ralph's really going to do? "If we remove item pricing legislation, what's really going to happen?" Mr. Gray said that it was Ralph's intention to take the prices off. It's inter esting that the Industry would have us believe that that's the way to bring consumer food costs do\vn because fvlr. Gray also said, "Well, you can't expect food prices to go down with the use of shelf pr1c1 " So, we have some double talk here that's confusing and it makes consumers unwilling to leave this thing in an abyss of regulation. Ralph's Grocery Store also did another interesting thing and it reflects on the price consciousness of consumers when th c asked to shop in a store without prices on the cans. Usually when consumers see a store brand, there's a presumption that it's priced at a lower price than a name brand. Ralph's Grocery Store conducted an experiment to test consumers' price consciousness. In a store where they had removed prices, they decided to raise the price of their own hrand of orange juice, and as I said traditionally, con sumers would presume that cost would he less than another name bra d. Ralph's found that consumers did not notice the price hike and that they continued to buy the product. As a result of that study, Ral
- 18 - permanently raised the price of their orange juice on a chainwide ba
SIS.
I'm going to close, focusing a little bit on this economic issue. Mr. Ray Bonner, who was with the San Francisco District Attorney's Office, raised a point and has articulated better than I can, so I'm going to borrow his words. He said, "Considering how essential ready access to price information is to inflation be leaguered consumers, it is somewhat disingenous for the supermarket industry to invoke inflation as the justification for taking prices off food." Thank you very much. I'd be happy to answer any questions. CHAIRMAN LOCKYER: Thank you. Kathie Klass from Santa Cruz County is next. Again, let me apologize to the people who haven't been able to find a seat. We did not expect as many attend ing as did and are delighted that you came and I'm sorry we don't have a larger place. We'll do our best to point out to you that there are some vacant seats if you'll just go ahead and slide into those and there's a few up here if someone wants to come up here and sit. MS. KATHIE KLASS: Good morning Mr. Chajrman and members of the Committee. I'm Kathie Klass from the Santa Cruz County Consumer Affairs and I'd like to begin by letting you know that since I've been in consumer protection, this is the first time that I've seen consumers as upset about an issue as they are over item pricing and they have come out throughout the State to testify at hearings like this at the local level. Like most consumers, I am looking forward to the compu terized scanners and faster checkout and the itemized receipts, but
- 19 - my most important shopping tool is item pricing and I use it throughout the store. Store personnel stocks shelves and stocking shelves goes hand in hand with item pricing. I think to do a proper job of shelf pricing will be more costly than item pricing and if I had to give up one, I would prefer to give up shelf pricing to item pricing, because I very seldom find that that is accurate. There are four complaints that I have received over the years in my office having to do with item pricing and one of them is that shelf prices are often moved either intentionally or by accident. My former boss who was Sealer of Weights and Measures for Santa Cruz County for about 25 years was 1n the grocery business before and one of his major gripes used to be that the kids loved to move shelf prices and they continue to do that today. I was probably at fault when I was a child myself.
Shelf prices are often found in different locales than t e item they're representing. Shelf prices are o en inconsistent with current prices and we're allowing this to be even more so with computers. Computer pricing can be changed in a matter of minutes whereas, shelf prices take a considerable amount of time and pe 1 with vision impairments and senior citizens have difficulty readi shelf prices where item prices aren't as difficult for them to r ad. It was years ago that we experienced the inflation rate that we're experiencing today and prices in supermarkets were fairly consistent maybe changed a couple of times a year. For anybody who is in a s e market today, we know tDat prices of jtems change on a weekly basi so there's no way that consumers can get a handle on what an item costs, so that we're asking them to memorize something that's almost impossible for them to do.
- 20 Consumers like to comparison shop. They like to he able to take their product throughout the store and since products are at shelf ends or in areas where consumers will see them when they're on special, consumers like the opportunity to look at the items they've already picked off of another shelf and compare with the shelf end. They like to take their itemized receipt home and compare it with the items that they brought home. They also like to go home and compare newly purchased items with old purchased items. This they can't do because they don't keep receipts, but all items manage to retain their item pricing. There's a big argument that doesn't hold true in a community in California with four cities and a population of 200,000. This is a small community. There are rural communities in California and consumers usually do not have the choice of where to shop like they do in the bigger metropolitan areas, so the argument that they can go elsewhere if there isn't item pricing does not hold true in Santa Cruz County and other small counties in the State.
In Northern California, there are approximately 12 counties
and 18 cities with item pricing ordinances. As Ms. Hamilton mention d, they're all slightly different. In Oakland where they have food • barns, they're in the process of putting a task force together to study and see how that's working, but that's been into effect for some time and the task force still isn't off the ground to check up on the effectiveness of the food barn's consistency with 20% less
1n food costs. I personally feel that one ordinance statewide i5 a lot easier for the food industry to comply with than 55 or more which 1s now the case.
- 21 In closing, item pricing is not a frill! It is the basic right of every consumer to know how much an item is going to cost! Thank you very much for this opportunity. CHAIRMAN LOCKYER: Thank you Kathie. I have a note from Sherry Baum about the Orange County group. When I say the Orange County group, there may be several, although we've heard from Harriett a little earlier, of course. How many people were there in that contingent that had hoped to testify? LADY IN AUDIENCE: Three hundred or more. CHAIRMAN LOCKYER: No, how many had hoped to testify. Do we have that worked out? LADY IN AUDIENCE: About 4 or 5. CHAIRMAN LOCKYER: You're not going back right away are you? The only thing I'm trying to do is, to be fair, to make sure in the morning that we have both sides present their testimony.
LADY IN AUDIENCE: We have almost 100 of them standing. CHAIRMAN LOCKYER: I know that's wonderful; I'm sorry we don't have more chairs. LADY IN AUDIENCE: We have reservations to go shopping and they're all standing out in the hallway -- loads of them. CHAIRMAN LOCKYER: I think it's very important. I don't want to interfere with anyone's lunch or shopping. In this town when they shop, they will have prices on the cans if that's where they're going to shop, but it just seems to me to be fair that we e some industry testimony In the morning to get both sides; so I don t want to cut anyone off. I don't know how long they will be; there are s1x of you on the agenda. Could you industry folks give me a time estimate?
- 22 - LADY IN AUDIENCE: How about three of them and three of us?
CHAIRMAN LOCKYER: Well, there already have been s1x of them, that is us, or whatever. All of the testimony so far has been from proponents of the law and that doesn't seem too fair. I'd like to run a balanced hearing. GENTLEMAN IN AUDIENCE: Mr. Chairman, I believe the tes timony you have heard is basically from the political section. Whether they were proponents or opponents is a statement of fact. It did not have anything to do with the consumer and the industry per se. I think we should start out equally right now. CHAIRMAN LOCKYER: It's an interesting interpretation of equality. My sense of the timing, frankly, is that we're going to be able to hear from everyone before we break if we run a little over or something. That's what I'm hoping we can do. It will depend on how verbose we get, so let's begin with some industry testimony and we can jump back and forth, depending on how the clock goes. I just think it's important that we be fair to both sides. Now, on the list is i\1 r . Howe . Are you f i r s t r Ir . Howe ? r!R. LES HOWE: j\Jr. Chairman, members of the Committee, I'm Les Howe with the California Retailers Association. I have a pre pareo statment which I will try to move through rather rapidly, but I would like to follow close enough so that the factual information we present is fully recorded. I certainly appreciate the wav that this Committee can draw a crowd. You do very well.
CHAIRr!Al'\ LOCKYER: It wasn't the Committee, it Kas the people. LES HOWE: Thank you. You've heard from the proponents of
- 23 - the mandatory item pricing law. They're asking for a State law in terms of these grocery stores with a computerized checkout system the so-called scanning stores -- and you will ar from others. y argue that the State Legislature should have retained the State law which expired on January 1, 1980 and that it should be reinstated. The California Retailers Association, whose members account for over 90% of the scanner installations in he ~tate would like t point out that after only one defeat following two previous success es 1n the Legislature, mandatory item pricing advocates, the retail clerks unions, the State Department of Consumer Affairs and some con sumer groups, elected to obtain such restrictive laws via local or dances rather than through the State Legislature. In other words, they've adopted a local option approach and they've done rather well too, I would say. Statewide, as I s here, the results are as follows: You've heard t er of ord ances for the whole State, of which 72 have beer ., pted renresentin 47.7% of the population. I want to point out one thing that hasn't been mentioned -- 19 ordinances have been proposed in various ju 1s dictions and have been rejected which represents almost 9% of th population. That leaves roughly 381 counties and cities in the Stat that have not considered this issue to date; they have not been hea as yet, but I think what you can see is that a substantial po ti of the State is now covered insofar as they are sho rs and under local mandatory item pricing laws. Now, I'd like to narrow this a little rther, particu ar y for the group here. In San Diego, Orange and Los Angeles Countie , yo have a combined (for those 3 counties) 36 ordinances that have b en
- 24 - adopted, with 64% of the population that are now under mandatory item pricing laws. Here in San Diego, particularly, you have, and that's why I wonder why this is an issue in San Diego, 82% of the population covered by local item pricing laws. In Orange County, 37%; and in Los Angeles, County 66%. So you can't say, no matter what your views are on the subject, that the local ordinance process hasn't brought the proponents' wishes insofar as a good portion of the State is concerned. If you look at it from the standpoint of the Committee members, for example, Mr. Rosenthal is not on the Committee, but I think you would find that his entire district is covered by local price marking ordinances. If I'm wrong, Mr. Rosenthal, tell me. So what I'm asking, in a sense, 1s why is this a huge statewide issue when the people that want this protection have acted to do so and have done it on a full-scale basis? Now, as far as our position on this issue--starting back
1n 1975 we have been consistent. Not everyone has agreed with us, but we've been consistent in asking that these scanning grocery stores and their customers be given the opportunity to decide this Issue without premature governmental action. In other words, how do you fi
out how people are going to react in the absense of price marking if you have a law that says you must price mark? How do you know what those consumers, those shoppers are going to feel? We've asked consistently, not only at the state level, but also at the local level, to each level of government before they take any action to see to what extent scanning grocery stores materializes within their jurisdiction. I have an Exhibit C, which is the yellow one indicating the kind of breakdown of the coverage in respect to
- 25 - t food industry in California. What fi out to lS at
there are only 360 scanners out of 3,200 sup erma ts whole
State, which lS about 11.2%. In Exhibit ee or not these stores continue to price mark. we i re e h
on this shows, that 77 out of the 172 scann s 0 s areas t
ordinances have continued to price mark volunt r y. So it isn'
fact you don't have an ordinance, you don t state t t
all the firms are going to decide they're going to str t prices off. Third, see how scanning stores' customers react if present
degree of item pricing is removed. I just wanted to emphasize a
point because many people fail to realize t. I 1 some o
is exhibited in some of our previous test 0 in t average non-scanning supermarket, only about 75% o 80% of the it are individually item priced. So you're real y not talk ng about
going from 100% to 0%. As far as this is ue c rned, yo talking about maybe going from 75% of item pr e in to pass 40% to 45%. You bring it down, but no one talks out it. Is it
mechanically possible to fully eliminate it pri 1 So after
jurisdictions objectively monitor, all we as 1 th t 1 happens in these various areas, because find
are unsatisfactory and the consumers are e d tis only then, do you look to see if nee e slat on.
ne d legislation, study it thoroughly to e ex 1y at k egislation.
Now the opportunity that we had a o fine ou
would happen in the absence of a state 1 ( h tha e
earlier this year), really di 't de e op 1 l he a c r t
- 26 clerks union, the State Department of Consumer Affairs and some of the consumer groups did not want to find out what would happen in
the absence of a state law. Starting in November of 1979 they began pushing for local ordinances. We believe this widespread adoption of local mandatory item pricing ordinances has created an unfortunate situation for the following reasons: I think some of this has already been touched on by some of the previous witnesses and I think in that sense, we
agree that there are some lousy ordinances out there. 1) a large number of the ordinances were hastily adopted with little or no study, and in many cases without the knowledge of the food industry. In many cases these ordinances were adopted where there was not any industry knowledge or even opportunity to be heard on this issue and Stanislaus County was one of those for example. So we can't say we've always had a fair shake in this. Most of these adoptions, let's face it, resulted from pressure from the retail clerks and their consumer activist allies acting in concert, which is all right. That's the American political
process, and as I say again, many of these ordinances are poorly drafted and reflect an unawareness of present item marking practices • 1n grocery stores today and as one of the witnesses pointed out, most of these are simply a "boiler-plate" of the original San Francisco ordinance which was far more harsh than the old state law. It didn't
even take into account those things that are not normally priced rna k in the conventional supermarket. I think I'm going to jump to my point five here. It places the Legislature in a very difficult position since it probably could
- 27 not act without pre-exempting the varying local ordinances and it could not ignore the fact that 19 local jurisdictions have rejecte proposed ordinances and that over 380 jurisdictions not e e their views on such legislation. In conclusion, we maintain the position that we have all along on this issue. We urge that each local jurisdiction 1 adopted a mandatory item pricing ordinance to objectively study determine if such ordinance is in the best interest of the community's consumer. And each local jurisdiction that considers a proposed ordinance in the future, avoid being stampeded into a hasty decis on. Instead, take the opportunity to see what happens in respect to sc e installations, price marking practices, and consumer acceptance n the absence of an ordinance. Lastly, the State Legislature take no action unless they find after careful study that a statewide a to item pricing is in the best interest of California consumers. I would hope, Mr. Chairman, that we mi t have a c rebuttal later if the circumstances permit terms of the pr 0 testimony.
CHAIRMAN LOCKYER: I thought u were r tti any p 0 testimony now. You may have more concern out s s nt tcs
how you try to rebut that and pe s re s C a we can keep the record open and hear the llow- viousl 1 s an infinite regression as they say, rebutting the r tt o t rebuttal to the rebuttal gets a little hard but we'll do our best o be fair to everyone. Let me ask this: Cou d ou 1 icate some the local jurisdictions, as you point out, that have rejected or dinances, or particularly, any sizable ci or county t t has h
28 - it before them?
LES HOWE: I have a whole list of them. The County of Sacramento and the City of Sacramento rejected. CHAIRMAN LOCKYER: That's sizable. LES HOWE. Torrance; I'm not going to read them all, but Anaheim, I believe has, as well as Fullerton. CHAIRMAN LOCKYER: Has one, or has rejected? LES HOWE: Has rejected. I have a list which is available to anybody -- proponents, opponents of this, as to what our records show has happened in this whole arena. The City of Palo Alto has rejected it. I'd say there's a total of 19 of these. CI1AIRMAN LOCKYER: That gives me an idea. Now, let me ask a question -- As I understand your testimony, what the industry is hoping to accomplish is to have an opportunity for a test of the economics involved and the consumer acceptance of a system of no item pricing. Could you try to help us understand what would be an adequate test? Is it necessary for the whole State to not have any local ordinances in order to feasibly test it, or some counties doing it and some cities not doing it, etc. as a way of testing that notion? LES HOWE: Mr. Chairman, my response to that is that I think what has happened here is, you've created more or less indirectly a laboratory situation, and I think it does offer the opportunity for those firms that have stores located in the "no ordinance" areas, to find out if they've partially removed price marking. What are their shoppers' reactions?
CHAIRMAN LOCKYER: In the list of 360 supermarkets currently 1n the State with scanners, could you estimate how many of those might be in jurisdictions with no item pricing re iremen ? LES HOWE: Mr. Chairman, on Exhibit C, I ve tried to l out all. ...
CHAIRMAN LOCKYER: Oh, it does s t t -- I see. out half and half; 188 with ordinances, 172 wi LES HOWE: Right. The majority of scanner located in areas that do have an ordinance. one o th tunate things that this is going to create, I I t i f' helps anybody's position, but a lot of firms who the C lCC r go1ng to refrain from locating their new scanning installations n areas where they have an ordinance rather than be le to go other areas. That's a reality and whether it s od orb s something else. CHAIRMAN LOCKYER: What would u estimate is pot en for scanners? You indicate that we're reall on v t k approximately 3,000 supermarkets 1n e enti e Sta Hith the po e for using a scanner. The way your figures bre , is th 3, 00 correct?
LES HOWE: The 3,200 actually esen e 0 p markets that exist in California today.
CHAIRMAN LOCKYER: c all of t se t anne or are some too small for that? LES HOWE: I might first define ermaT et. at generally regarded as a grocery store 1ng an annual volume of $1 million or more, but to make an investmc in s today, and all these changes have been po nt ou with infl io u probably have to have $8 mill on in annual vol Yo
- 30 be a big supermarket before you're going to go into this and not all of those supermarkets, unless the technology changes a lot, are going into scanners; they can't afford it.
CHAIRMAN LOCKYER: Of the 3,200 stores, how many would you estimate as having a volume of 8 million or more? LES HOWE: I'd hate to give it because I'd say probably a fourth of them, but that's just a guess. • CHAIRMAN LOCKYER: So, it's perhaps 800 stores or so? LES HOWE: Today, and that's going to change as time goes on because it's like income tax and you move up through the brackets, so it's inflation and volume. CHAIRMAN LOCKYER: We'll have an item pricing indexing bill
something like that; you don't go up in the brackets. Of the 800, almost half of those have a scanner, and almost half of those where there's a potential for it seem to have it. Of the other half, is there any way you can estimate the time it would take for them to shift
into that sort of system or the likelihood of them wanting to ~hift into that system? LES HOWE: I think there's pressure on the industry to im prove productivity. Every facet of it is certainly looking at this and I think no matter what our views are on this particular part of the issue, there's going to be more and more scanners. I think
roughly speaking you get about 15-20 more per month 1n California. CHAIRMAN LOCKYER: So you feel then there 1s something of a laboratory currently existing with perhaps adequate opportunity for the industry to see consumer reaction in the non-ordinance areas? Does that seem correct to you?
- 31 - LES HOWE: I would say that and I would say that they would have the option in those areas to make te ion a er checked with their consumers because as I po out, a st half o the scanning stores in areas that do not have an ordinance continue to voluntarily fully item ice. So it doesn't mean that you str the thing down. I'm talking statewide; I do not know all the local practices. ASSEMBLYMAN ELLIS: Mr. Howe, business there's sort of a philosophy that if people want something, or if there's a need, it will be filled and a service will be provided if the people want it. In this case, if the people are willing to pay for the extra cost of item pricing as you've stated, why don't just provide it? --- APPLAUSE -- I don't like that kind of applause; it really distracts me personal It distracts from the whole proceedings pe le are out r clapping and cheering and I just don't care r it, personal I the people are wi 1 ling to pay, we could put it to a vote and if the people say yes we want to pay 2¢ or 2% or whatever more, why not le them do it? LES HOWE: In response to that, Senator Elect, the dist tion is who makes the determination as to what people are will accept or not. Do you do it through organi ed consumer s, through the retail clerks, or does the store t to measure this terms of their own dealings with their shoppers and how it reflect their volume? If they have a scann g stor one location l customers do not like the way they're deal Wl respect t this issue, then it's going to reflect on ir volume and they c 't
- 32 - afford that. ASSEMBLYMAN ELLIS: How has that been reflecting so far? LES HOWE: There are some other witnesses who will touch on that, but I think what you'll find is that it's not in terms of what the stores experience themselves. They are not having all the clamour that you are seeing here as far as their shoppers. In response to that, and your comment, Mr. Chairman, I think we do have a laboratory situation and we would certainly have no reservations about having any kind of objective monitoring from the standpoint of the State as to what's going on out there, what's really happening, or any ob jective analysis of the quality of the local ordinances, or any of that. I think that in terms of the more objectivity we can get into this issue and the less emotion, the better result we're going to end up with both in terms of the industry and the consumers. ASSEMBLYMAN ELLIS: I have a suggestion on how to do it: mark half the items and charge the person what's marked, and do not mark the other half; let the scanner do it and see how many people pick up the marked item and how many pick up the scanned item. It would tell you real quick. LES HOWE: You're talking about the same store? ASSEMBLYMAN ELLIS: Yes. Open a can of tomatoes and mark half the cans and don't mark half and see how many people take the marked and how many take the unmarked. LES HOWE: The thing is that in a study like that you wouldn't have any of the savings because it would be more difficult to set up that type of situation. ASSEMBLYMAN ELLIS: You're not going to save anything; you're going to find out whether it's consumer acceptable.
- 33 - LES HOWE: 's one I've never I'd certa it out. I'm not an self, so e lly 't
E IS: e a s l an item that's clear because I to t to checkout stand go a hassle over it costs bee usually they c 1 the manager b room the whole mess and it's easier to a well- item, I th If more people el I 'd out real ck ' LES HOWE: We're open as to to out people really feel.
CHAIRMAN LOC I wanted t a one llow- on laboratory. How long of a test period is necess ? Is it pos to give some general view the industry about whatever it is need to learn? How 1 s l t to learn
S HOWE: I 't eci
CHAIRMAN LOC e I can a t
LES HOWE: G us t to th about will 't want to give you an off- -cuff answer on , Mr.
CHAI LOCKYER: 1 ri Mr. Howe. we have next? Steve Koff?
MR. STEVEN KOFF: Good morn irman, er o ommittee. name is Steven Koff I'm w the Certified Groce s of Cali rnia. I resent a s 4' independent grocers throughout Cali rn a r the small gr ce reducing operat costs is critical to us. ers cant watching the pro ss of scann and 1 ative act i re- garding item pricing. believe scann wo s pro vi r more efficient grace t and t or r r a tot 1 scann
- 34 - system to be effective it must allow for the removal of item pricing
or only shelf-tag pricing. A majority of the independent grocers
have held off from making a substantial investment and acquiring scan
ning equipment because of the possibility of government bodies requir
ing mandatory item pricing. Presently, we only have 16 independent
markets in the State using scanning; however, not one price has been
removed in any of these stores. More retailers would go into scanning
if an option of shelf-tag pricing or item price removal was given . • Unlike the larger chain markets who enjoy inventory control savings, the smaller grocer can create savings only under a no-item pricing or
a shelf-tag proposal. Also, scanning has significantly helped our
stores compete in the inner-city and the urban areas. Efficient stores
are desired in low income neighborhoods and more often than not, costs
are higher and operating margins are lower. These areas have lost
stores because of legislative inefficiencies. We have recently opened
six stores in the South Central area of Los Angeles which feature
scanning and productivity, and cost-efficient service has resulted 1n
each of those stores. Prices have stayed on, but even a greater cost
efficiency would be allowed if shelf-tag pricing or item pricing
removal was allowed. If you require mandatory item pricing, it costs
our retailers money, and does cost the consumers money and it makes
it even more difficult for the smaller stores to compete with the
larger chains. Many people in California are served by smaller
grocers and these people who use the stores should not be penalized
by having added costs of mandatory item pricing. The Independent
Grocers of California would hope that consumers and supermarket oper
ators in the State can continue to learn whether accuracy and shelf
tagging and accuracy at the register can be maintained without the need
- 35 - f a sta law. as
r
w
8 1
s a ve curate.
ex
t
ann
sitant ri now. It scann b e of ord
war e l w
1 s 4 0 0 we feel we are beginning to make an attempt in not really cost re duction, but in cost efficient service. It's a beginning through food distribution; we don't know what will appear in the supermarkets on the shelves, or if food costs will go lower. There's a lot involved in what determines the price of food today, but we feel we are making an attempt in that by opening up this mechanized warehouse and it will be helpful to the future. ASSEMBLYMAN ROSENTHAL: Do you have some idea of the number • of independents that are likely to install computers at some point? STEVE KOFF: Speaking for our company, I do know of about 15 different small chains that are contemplating the use of computers in the near future. ASSEMBLYMAN ROSENTHAL: I'm talking about the number of stores. STEVE KOFF: It would probably work out to about 150. ASSEMBLYMAN ROSENTHAL: Thank you very much. CHAIRMAN LOCKYER: Aren't there savings with use of the • scanner independently of the cost saving from not having to mark the individual item? Aren't there some cost savings even if you have to mark the item in use of the scanner? STEVE KOFF: If you have to mark it, it would certainly cost us more. CHAIRMAN LOCKYER: inventory, processing and labor costs of checking out people, etc. Aren't there some cost savings there? STEVE KOFF: I'm sure there are. I don't know right now what they would be, but yes, I'm sure there would be; but to mark it
- 37 - does cost us more to do so.
CHAIRMAN LOCKYER: Thank you. Mr. Beaver, please.
MR. DON BEAVER: Mr. Chairman, r f Comm tee, name is Don Beaver. I'm the Executive Vice-Presi of the C 1
Grocers Association. Clear accurate shelf price tags and full ut ization of electronic scanners in grocery stores are only ef ct tool in the industry today that will increase pro tivity and ke prices down. The 11 use of the scann tern has oven successful to the customers that have had the opportunity to use system and it's clearly demonstrated its reliability and efficiency throughout California where its use is pe tted. Some communitie have chosen to allow prices to be marked on the she s on many i ems and full utilization of the scanners. Others have required the continuation of costly redundant pfice marking on e item and stil other communities are testing customer reaction stores allowed operate with the more efficient system. Lett customers c1 seems to be the fairest approach and it 1s approach which the members of the California Grocers Association support. There is solutely no doubt that this continuing the necessi of pric
item or even the majority of items in the 11 utilization of scanning system can hold costs down and t saves consume s
We hope the state and local jurisdictions 11 cers opportunity to introduce this cost saving s em to customers wish to take advantage of it throughout Cali ia next
few years. I'm not going into of stati t cs 1
Les adequately covered that and I know you ur own analysis.
- 38 - I would like to make a remark on some of the earlier ladies' statements on the consumer's right to know and certainly the grocery industry supports the consumer:s right to know the prices. But I think what they are overlooking is that the stores that are using the full scanning systems with any prices removed do have accurate pricing systems developed in these stores. They're not just haphazardly going about the scanning systems and developing them. They are systemati cally monitoring the prices that are on the shelf, the prices that are in the computer, and the prices that are being charged on advertising items. Now, certainly we have to continue to perfect these types of systems. The other portion is, one of them made a remark about net profit. Net profit is when it comes to a store using the full scanner or a store using only a scanning system that still has prices on it percentage-wise these stores are still running out the same net profit percentage to sales which is about 1% or less of their gross sales. So the stores that are removing the prices are running 1% which means that they do have cost saving prices those stores.
Safeway has a new store t~at's been opened a couple of months out 1n the Greenhaven area in Sacramento. When you get back to
Sacramento in December, please go out and talk to the customers and look at the prices. There are stores right across the street from them
don't have the scanning systems; see if the people are unhappy shopning in there. I've been out there three times on different occassions, listening and talking, as a consumer. I'm not out there trying to get a survey; I'm more interested just talking to people to get an off-the-cuff remark from them. We don't see any unhappy people out there; they do have confidence the system and of course,
- 39 - that's what it's all about. The stores prices on s lf below each item 're not s re rr t t used to stores
fl them out. se tags are no 1 s. tags that are there today are very diffi a need a little suction to get out t even price of merchandise to be d be lease to answer any stions t ASSEMBLYMAN ELLIS: What do i e di renee 1s labor cost, item pricing and in shelf pri as just descr it?
DON BEAVER: What is dif rene t 0 ' on the volume of what the store 1s runn Fo aver e sto that is into price removal and the full scann ern, just on labor of marking mer ise e be
$70,000 and $100,000 a ar. t can e en sto es upon their volume and how many cler are merchandise.
ASSEMBLYMAN E IS: Were not p s lf p
also and item pric 1 Then all did Iva DON BEAVER: t's ri
prices in the store even if t s e .
Items that cannot be p er l if d w s ' are too small, still have the prices on t s t a
store sweep. It's the s mov it r have to restock that item some of se sto al s because they do turn over so fast. se e t can make the savings to the store.
- 40 E I sort of t r ssion om some
previous 're s lf pricing;
em c el t would
ence cost to s r c letely tern with s anne
't e gone in that
rec i I I consume a a rat
e p I 're ta just t it on
me ise. I real 't s can be; I t have any fi Most o either gone to the s lf ding i IS ee r pe le who ave aired vision it is to t little small p ice on can itself, because se least over e ess of a lf hi re on t a quarter of
0 less.
EL IS: s 0 0 0 to el ting s lf pricing and ing only t t' s t the p le want
reason mo t o not el na
k of s lf tag pric IS becau consumer tional rmation on un1 p c 1 ounce c.
th is is t s s wou d want 0 di at. s o r 're coded and scann ystems c p t t item
r r g oses us s re s itional tion on it.
E s: Oh, us s invento control?
- 41 - DON BEAVER: Yes, there are many things that that tag is used for and it does need to remain there. ASSEMBLYMAN ROSENTHAL: Mr. Beaver, t s experience that you could refer to when the person discovers computer price different than either the one that's marked on can or on the shelf? Have you heard or run into that? DON BEAVER: Yes, I think it would be na to stand here and tell you that it has not happened. I think any time you're to develop new systems in a store, it does happen. But I think the stores that are using price removal on errors will give that customer that item free. I know you're going to say, how do they know that it' free or that it's been mispriced? The consumers have found these items and of course reported them to the store. These are one of the 1 that the industry certainly is working on and that's pricing inte i
These stores have to monitor these things so t they do not occur. They're human errors and no one is making entionally and know they keep eluding to the fact that some dishonest store manage is going to raise his gross profit 1n his store by some astronomical amount to impress his boss; that just doesn't happen. These retaile are very honorable people and they're here to serve the consumer; they're not out here to try to cheat them or t to get another p out of them. They can make an adequate profit doing a good j and running a tight operation and seeing that consumer is t care of and that means seeing that these things are adequately and accurately done. ASSEMBLYMAN ROSENTHAL: One of the thi s that concerns me about removing prices from the item and having it all in the compute
- 42 - is concept, and we've heard it mentioned earlier that you can raise prices daily. If you buy an item r 20¢ you sell it for
25¢, you 11 raise your price almost on an basis, if neces- s , because you may be purchasing the next item at 22¢ and you then get your additional increase on the old purchased merchandise. How do you respond to that?
DON BEAVER: The only way they can keep track of the price increases that go on, and there are thousands of price increases a week from the manufacturer, is to change those prices when they get new merchandise in. That's the practice today and it is absolutely neces- sary in the way that the retail grocery t does business. Now they don't go back and find out through some telephone that the price of beans has gone up and run out and change them today. They wait until they get more merchandise in. Then they price and it must be changed on all of the product because computers would blow ir minds. You can't have two prices in those computers; it has to be one, so they must be changed.
ASSEMBLYMAN ROSENTHAL: I underst t you're saying,
I know that every shopper, for example, will pick up two or three items on that shelf and if one is 20¢ because it was purchased two we ago and one is 22¢ because it was sed sterday, they
1 pick up the one with t lower pr1ce. ith the computer se
no item pricing, the market gets the on the lesser cost
tern.
DON BEAVER: The market is hav to today where they've got the scanners or they don't have scanners. Those increases must be taken as they come throu the supplier and the merchandise that's on the s lf must be ed. Unfortunately, when you see one or two prices of an item on 1 l t ct to sloppy merchandis on the part of ld be, because c r cannot rent prices and the retailer real s not is s different prices because it s ve s r' yet, they must change those prices as titian di that today. SEMBLYMAN RO must ices Competition dictates that? DON BEAVER: Or downward. ASSEMBLYMAN ROSENTHAL: Come on now, pric not down. DON BEAVER: I agree that maybe 5% se up do go down. There are that many t 25% some kind of promotiona allowances t type deals or they are t r or permanent s some kind of decrease the cost
CHAIRMAN LOC I I d briefly. Please try to be ir :iJ 1 t
Whether you agree Wl witness or not, s in rebuttal ever one waul 1 t a ile process it lps 1
The concern I Mr. Beaver,
you respond -- I gre tes
to advertise some loss 1 li
it might be and run big r c quently do, and then use of ers allows greater flex ili slid t
- 44 - tised item to other items. I don't real industry practice well enough to know whether that is a real poss ility or realistic
or not. I d li to re l would. DON BEAVER: Clari what mean sliding off. IRMAN R: What will en is t they advertise some that sounds li a great b tever it might be, and items t were d store real constrained the abili to pick up that potential loss on o r items. Using the computer system lows the stores to rt se ir loss and to pick up the potential loss on something else people aren't looking at as closely. Obviously people comparison s , but they don't it every time or everyday, and frank , I'm whether this new technology allows this to happen more fre DON BEAVER: No, this absolute es not happen. When a store runs an advertised item, they no r e o r merchandise. to offset that. This is all figured store s turnover of merchandise; it's what they call the pro t ix. know ahead of time how their loss le rs are t af ct their gross profit . ahead ot time when they price of se rtised items or marked down items are to be and they
a he of time t they can age-wise rna down
t 11 rna ta the gross profits a week, year basis. They abso ute not raise o r prices to make that! CHAIRMAN LOCKYER: You testi 1e $70,000 to $10 ,00 p r ore is an approximation of t cost s a scanner system and not item prici What d e ost saving of hav
- 45 - a scanner system with item pric compare mo of t ckout as it current is al
mean, CHAIRMAN LOC it the way they current it
DON BEAVER: 're 1 at
CHAI LOC a 11 r s '
DON BEAVER: runs all over figures down as low as 0 I've seen i as
There are figures out lication to s can save as much as 20%; I ve seen fi yet how reliable these figures are. industry wants to experiment with is 1 a level of what the sav s can be to t 1 it's nothing, they're go g to bac
years and that's t p you too, if these ose places to s because li be back on that mer t a enough test market on se items 0 average basis based f rent VO
the consumers. But I' on 00 a
rtised or in t ica io s
CHAIRtvlAN are
scanners?
DON BEAVER: are mar t s
Register, IBM; there are ies.
- 4 t's an ssion we es d have asked
t t g
el ; ir
I
I rec ate
o tuni to I wa ed see t I was promot this morn bas d on
The reas e is bee not only
Albertson's rn Cali rnia ivi t n director als be t 's aero s country. current erate scanne 0 divisions. our I vision, Flori
iv ion, re we t r c
een l it tel 1 on locale reas. s
t on s c o se pri e ?
1 0 0 s
0 0 t
been. r D
our ise 1 t D
our 1 r v
ss aunt s.
y, cr e
e e ail s l 0 come b to our stores or don't they? It's a very simple process; if you're
dissatisfied with something, you walk away from it. If you like it you continue to come back. In these areas, of 1 :J.re s
areas, rural areas, high density areas he cities, large cities
like Denver, etc., we have been very success not losing
volume which is the basic criteria for us to ss with. In
the State of California we currently operate n scanners
California and five in our Northern California D ision. We have, at
this point in time, not removed prices from our stores in the Californ
region. It is often hotly contested, as it has been this morn
as I've been attending various meetings throughout state over
last year and a half. We have not chosen to go it t, not becau
of the controversy per se, but because we want to make sure our s t
are adequate to protect, not only the consumer's erest s
in our store and knowing they're going to t t p er price one
they leave the store, but also to protect our assets.
I'm open for questions. Those are basic comments I
have. There were also questions directed to p le I lt
weren't able to handle them. I'd like to t
CHAIRMAN LOCKYER: I guess I'd li to beg , if you can
give us any cost estimates of the sav s a scanne or no
and without item pricing.
DAVE MCMAHON: The scanners bene t stores
so you need to get specific. Are we talk front serv c
are we talking about gross profit levels or t?
CHAIRMAN LOCKYER: Well, it's all erest I s
gross is the one I'm trying to get at. Reg re
savings come from -- say there's a state law t requires item
pricing in California; is there still an ent to use scanne s
- 48 - 1 eve seems to are convenient consumers
s t also t i f 1 ent to e r
t 1 tern pr c law?
n a ss is t
t. ar wi me.
er e tern pric o
not. e s s t tern ic , • was CHAI ar amount at al ?
o t a 1 ar
amount becaus we at o tuni to t s
see exact y how t 's 1 to 've been relat 1 new at it.
r t? p it, are or sav
ct e
1 t t p of t.
would t ica mean? Is r s al s erma terms volume
9 - DAVE MCMAHON: No there's not. That's why I'm saying I gave you a sample of the stores we have. We have 400 stores in the country and we currently have about 10 stores where we've removed the prices. It's a general range right now because there are various types of stores and each one is a particular unit itself right now because there are various sizes. Some stores are 72,000 square et and others are 18,000, 19,000 or 20,000 square feet. CHAIRMAN LOCKYER: So within that range of five to ten percent how would it break down the elements of savings within that range? What porportion would be labor at stamping the cans compared to labor at the checkout? DAVE MCMAHON: Not just stamping the cans, but the labor savings in not having to price and not having to do the price checks for items that aren't marked. The other sundry items related to that would probably take on a dollar labor expenditure. Anywhere ten to 25% of that dollar would be saved in not having to do that pricing and/or the price changes that are attended with that, and rest of it would be affected in being able to have all the items price properly going through the checkstand and not having the human error problem that we have now where an item of 69¢ is marked 96¢ which e in the customer's favor; likewise it could be 96¢, charged 69¢ st on an item which could go against management favor. CHAIRMAN LOCKYER: Do you think there's error more often one or the other's benefit? That is, does management benefit or customer benefit more frequently from the error factor? Roughly I would think that would work out evenly. DAVE MCMAHON: I would say on balance it would probably even itself out.
- 50 - industry. The dollar value that we spend our eve 1 s not been raised in the grocery business. prices are go every time we receive merchandise into our war es across country. We do not go out to our stores raise prices eve
We gather those price changes, we put oge our Boise corporate office and they are transmitted over tel
It's a very sophisticated communication system to stores to b enacted within the store. So we change our prices once a we k. s whether we like it or not, prices are on rease, so more f our prices are going up than down, unfortunately. That is the tr we're in right now and let's hope that thi swill w 1 our advances and we will do our declines. t e
into the computer until they've all been re we
affect it that way. If there is a customer t tore
time we raise it they are not going to suf r t f , ten o
ever the item percent raise is. We don't t t in until al
items have been changed. That's a safe valve t we uses we won't misrepresnet ourselves to the customers. have the capability to do with scanning stores
the approximately 390 stores, is that we can an tantane
of any of those stores right in our ise o lC al
b again through the telephone stem 1 trans its
a week and they are verified instantaneously as p er pr e .
Now, on the shelf, if the tag wasn't remove e person
the price change, then there could be a p lem. If eve
jobs along the line then we would have 100% price accur what we're shooting for. Those were a c le of stions member that were raised and I hope I helped to answer them.
ASSEMBLYMAN E IS: What day of week pri s
ric we a a1
L t l ? d to be mentioned.
t to s to rate. calculat er tr tional or conventi al stores scann s s we t a ate an error rate
st d st re c i li 1 re r 0 would e a 1 basi . Ei out
it someone s it 0 t it, or t i servic s f thi s. il e u a 1 e one comment earlier r out
cr rai e t e c so could b e s of would look be ter to h d c
0 it in s stor t t woul b
+ t on rt L e t 0 d
t d
e s an aut t r.
st on t s y s
t r t t
i 0 t. wouldn't be prepared to speak on that. Thank you.
CHAIRMAN LOCKYER: I'm going to suggest that we just
continue to operate because there are several pe e w1 t
constraints that would like to be sure to testi be re we t a
break, so with the patience of the audience, I we can hear
everyone. Ms. Gaines is next.
MS. ADRIENNE GAINES: Mr. Chairman, members of Committ
my name is Adrienne Gaines and I'm represent Stater Brothers
kets. My position there is Director of Public Relations. I
been the fortunate one, and I say that sincerely, to deal with
is being discussed today - a consumer issue. I am here basical
to explain to you some of the things that we
ized scanning and item pricing.
First of all, earlier in the day, we brought up which
counties have rejected ordinances. We been rtunate
Bernardino County and Riverside County. r i Ci
sent their piece of legislation to their own litt e terim s
and I happen to be sitting on that committee now. 're a
basically with the consumers of that parti area.
in going into areas that we presently have 32 scann stores.
of those 32 scanning stores within those cities re is on
city that has legislation; that city is C of Ontario.
e very fortunate to work collective ci council
recognizing what the industry had to of t
to justify. They granted us a sunset ord ance WI tions
we have been extremely fortunate 1n that ci
We feel that we've set an excellent prece as s
computerized scanning or item price removal is concerned.
- 54 - e 0 e p e.
c
r
0 r
I
l
t
s
s
1
32 g l a 1 complaints. I have gone out and talked with se l ls, t them to the store, explained the system, explained our philos where item price removal is concerned and ace ted are doing. I think the problem that we are ed lS are not familiar with, they feel there's a price r
Product Code, they feel that again there's ri people that the big business is going to r us off; t s not t
We have various different pledges that we g to our customers.
question was brought up -- what if an ind 1 1 s ged
price on an item? That individual comes up to automatic
area where the groceries are being checked out and if pr1ce s 1
differ in any way, we will give that item either
we'll refund the total amount of that item to
think that the industry is taking all of the posit
the customers that they are not ripping them off.
industry has also looked at is by implement
it is eliminating human error and where human er
key entering a price into the machine or
on an item. That's where your error factor is
found that in our stores. By implementing computerized scann it
is the most effective way to serve the customer I
industry would have been entirely foolish to lement some 1
his if they felt that eventually the people woul 't ace t it.
I answer any of your questions?
ASSEMBLYMAN ROSENTHAL: I don't 0 re s
suggesting either pro or con that the computer lS not a d i
you have any stores in the vicinity that computers as well a
item pricing near your stores?
- 56 - ADRIENNE GAINES: Any stores? Are you talking about other chains? Yes. ASSEMBLYMAN ROSENTHAL: In other words, across the street is ano r market that has a computer and item prices? ADRIENNE GAINES: Sure, there are many of those. ASSEMBLYMAN ROSENTHAL: Name one. ADRIENNE GAINES: I can take as an example, in the City of Riverside, there is an Alpha Beta that is computerized scanning and there's item pricing and we are not. Well, I'm not saying we are not 100% removal; there are items that we have removed such as canned tomato sauce, baby food, jello, Kool-Aid, things of this nature that we have removed prices from. Ninety percent of the items that have been conventionally marked are still being marked within our stores. ASSEMBLYMAN ROSENTHAL: So you have not removed prices from those items which have the big turnover? ADRIENNE GAINES: No, we remove prices as our "Stater Saver' items which are a lot of your staple goods. Those are big turnover items. We remove prices from those items. We remove prices from our milk products. We remove prices as I said from our jello, our baby food, our Kool Aid, individual cans of cat food, soap dishes, our dog food aisles. I have a list of them. Those are turnover items. ASSEMBLY!Y!AN ROSENTHAL: Thank you. ASSEMBLYMAN ELLIS: Are we going to get a list of those items? ADRIENNE GAINES: I can furnish that to you. ASSEMBLYMAN ELLIS: It would be interesting to see what you have removed. You gave one example where you said that right next door is a supermarket that does not have a scanner and yours
- 57 does. Is that right? ADRIENNE GAINES: Not right next door, no; he was asking me within the vicinity. ASSEMBLYMAN ELLIS: Before he asked the question you said
in one area. ADRIENNE GAINES: Oh yes, in Sun City. ASSEMBLYMAN ELLIS: In Sun City there's a store right next
door? ADRIENNE GAINES: Yes, a Safeway right next door. ASSEMBLYMAN ELLIS: That has the conventional mechanical and you have the scanner with these items removed. Now did you a conventional method before you went to the computer or did you in as a new store with a computer? ADRIENNE GAINES: No, we had basically a computer key ent type system; however, all of our produce was being maintained as it is being maintained today. That is, your produce, for conveni of the shopper in the produce department, has the price per pound package each in bunch; however, when you come to the checkout cent you don't have an individual price on your broccoli. The clerk i
trained to index a code and again, the reason for those codes lS to eliminate that human error. Let's take bananas as an example of SSO; that's signifying to the clerk that it's a scale item. Fi is representing the price of that particular poundage of bananas. So they index that code into the machine and t comes up on the screen is the total price of the poundage, that they're purchasing, etc. ASSEMBLYMAN ELLIS: But, was the store in Sun City conventional?
- 58 - I , it was recent converted, I believe,
in April.
L a me l al to a
scanner next at is me anical?
I I at is correct,
IS: ened to volume
that store store?
I INES: It rem a d same. I do not have • dollar percent s' but I do t it is one of our high- est volume stores t t vo has rem a d same.
AS LIS: I ss t what the other
stores
ADRI I S: as actual s, I'm not sure
at this time.
S: el store hasn t
red. I also have o
ons and our
i has eased,
t, I'm as
to start is?
California
t buses wi
e?
rs of
r ern Chairman
- 5 of the California Federated Women's Clubs (CFWC). MS. SHIRLEE EARLEY: Good afternoon Mr. Chairman and your committee. I almost thought I was going to have to say good even We hate to feel like we were rushing you, but as you can see we brought bus loads of people down from Orange County and many of them are senior citizens. We didn't know how long we could really ke them here without having their lunch or rest. They're standing out in the hallway and they're standing upstairs as you can see. This didn't take much effort to get these people to come; we just let out a few feelers. We represent the people and we just let out a few feelers and everybody and their brother said they wanted to come show that the people really cared. I've appeared before council meetings and this has been brought up many times today -- why don't the councils vote for item pricing? I'll tell you why they don't vote for item pricing. They listen to all the grocery lobbyist until midnight and one o'clock in the morning then tell us we can come and speak our piece for two seconds. What can we say in a minute or two? By that time, we're all dead and tired; everyone gone home. They mentioned a couple of times to us, "Well, if the people feel strongly about this, why aren't they out in the council room? Why don't you bring people? Maybe it's just you and your buddies that care so seriously about this subject." So we decided today to bring the people down with us to show that we really care and the majority of the people really do care. One of the reasons we are fighting s right now at initial stage as you noticed in the newspapers in St. Louis, all the big supermarkets decided to get together. The people had no idea that item pricing was going to be taken away -- no idea
- 60 - whatsoever -- th were t warned. rful
council members and s e sors li we County that
warne us is was rn1 d to remove
all prices and ople were a state of s when
next day, rs ld to go shop
els re if they dn't li it. Well, can't tell people to
t on a tra or a us, or a plane next ci to
ir s They itely scovered t practic- • ly raised the prices at least percent ri across the board. Do you realize how ea it is to se p es just not having to
change the individual ices on se cans boxes? just
to press a button and se ices go can up ten per
cent everyday without us realizing it we want a ice as to
how we spend our money. ation is eat it We have very
little of it le to we st s ld
we're spending for we t were told
the grocery industry they would save us if they could take
item pric away, one- h of one perc ! s lr s
that would be about ten cents per lars wo of pur e.
will g em their ten cents. We our prices
before we se.
They ep cla t re o save us We
t aga t scanners; I want t s .
canners are wonder we want to scanners are
out with answers. 0 s i
s ght unseen t until canner
before you find out re
I appear e e state
1 - because I am Consumer Concern chairman for CFWC. We're the largest volunteer women's organization in the United States, fact e
world and when we ght we fight. 1 we're ask is truth in pricing. We have fought for truth 1 and t in packaging. Before we fought this battle big concerns told us there were eight ounces of potato chips in bag we scovered
1n nine out of ten cases there was nowhere near ei ounces of potato chips or whatever in the package. We is ted that they to give us, if they said it was eight ounces, said it was ten ounces -- that's what we wanted and we fought for that and we got it.
Now you can be assured when you pick up a package or a can you've got what you're asking for or what you paid and IS 1 we' asking for now is truth in pricing. They claim their bus ss is not getting lost. I can't understand this. I not talked to a woman or a gentleman in this whole State of C 1 rnia 0 s sai that they go along with these prices being removed.
My fan mail -- I might have to move out my husband's
1ng I'm becoming a celebrity. The mailman is bre his ba bringing up all those letters when they appear. ople from all over the state are pleading with me to keep this fi up. said have written continuously to every store t ices away, pleaded with them not to do this e i re
Now they're trying to tell us, "Where are p le, aren't they complaining? They want this or 're be out re complaining." What do you have to do to let em get mess e.
I know they're in the store complaining all t I went o those stores myself and I guess I have a k of a ce eve one walks up to me and starts talking to me. st eve
- 62 - the store would say to me, s price of this? I can't f it re. !I 'd be on our hands es crawling around lo r most 0 us are e y women we to put on our glasses. 't k of time and most of the time we do not card that sents product. It's
down five feet 1 somewhere. I got a letter from a women sta Mesa at s d she e n't ree people that
ght causes. She th we shouldn't s, but she said this lS one cause that she's to r 100 percent and hopes that
I keep it up. She went o this store Costa Mesa the other day and it was before Halloween. It was newsp er letter to the editor also and she caul 't find the of or gum that she wanted to buy for Halloween. She lo ed all over for this they're talking about and it coul ! t be anywhere so she went
to the checker and the cker said "I t unless we it over the scanner. I no l a t lS to cost."
She said she didn't want to buy it be if the price was within reason. So t r out said he didn't know the prices either.
I had to go shopping once to push my gro- ceries five t s over e scanner s t I said, "Why are
2ng that? I hope I m not tt run t s r each
t that I'm led under his
reath and said, scanner hasn't been If I
aid, "Well, if scanne is 't wo s i to tell
the prices are"? He sa d, 't me I we
scanner has to tell us t prices are. was marked so there was no of check at prices were. I
- 6 said, "Do you mind if I step aside, after he got all through, and see what prices you came up with? Because I don't want to be pay- ing five times for one product." I hear or stories
They said they don't make mistakes. I had women going out there everyday on purpose just buying two to ten items and every single day that week there were errors. They come up th errors every day. She was looking for it because we wanted to check it out to see if they really make that many errors. Some of the errors were small, some were huge. But do you realize how many people would be embarrassed to really check out to see if the scanners come up with the right answers or run back and check all those prices on the shelf to make sure they're right. Suppose it mattered just a few pennies? Do you realize what they would make before that was caught. Those couple of pennies add up to thousands and thousands of dollars. I think what we fear the most is, d that s- tion. You asked what day do they change the ices. It on takes pressing of that scanner button to change all the prices the store. That takes only a second to do. I can see them ing that on a busy weekend when you can really raise the prices, but you can't send your clerks out there to change 1 the ices on the cans and boxes. That will take days to It's bad enough that they're changing them while you're st ere, the ones that do mark. You have to take off those little 1 els to get to the original price. They put on four 1 els. I IS
they want to get rid of pricing, they don't want us to realize they're raising the prices on us. Do you realize - om li rnia
500 - that the supermarkets made 24 percent net worth on the a- fit? The next largest company made 14 percent and that's d
- 64 - Oil of California. t to tell us al oil companies
are gourg us, but s ts are a lot more money.
want to a st fi want assurance
're not t us cleaners. want assurance that what
we b is at we're r. want i s on there. I
can't rstand how can be dragg s further. I
can ee you I can walk 0 store from any
one of those supe ts st eve IS there and
• say, "Do you want your prices to be removed just rely on the scanner"? The percentage is at least 99 9/10 want our prices
on there. If we sit back and let this en, it 11 en li
it d St. Louis. rnight all c s ill e gone,
you can't bring them b once they're gone a We're
fighting this now be go all the now, they're
usi us as guinea pi to see if c we're
trying to tell em we 't want it listen. A
remark was made that most of the councils s can't make the
decision. They told us we to go to our state le slators.
They think this is a state p lem, not a local p lem. Well we
are appealing to you, our state elect 1 islators. I am sure --
you look like le pe le, I li 0 of
t you were elected to serve e 11 listen to
won't you? I guarantee 99 9/10 of p re e
very strongly that we want our item lC el you as
our legislators firs pre renee lis voices of
e people. We are e pe le. If we to of
you at eve single meet t all is
trouble of dragging lo of pe le 1 of our cities,
- 65 we will do this. Another thing we can do is to organize an initia tive to put this on the ballot, and I guarantee you that ballot would win in our favor by such a sweep it would make your head sw
That will tell you what the people feel.
I got four buses to bring the people down here. I never dreamed in a million years that all these people were going to show up. The buses were already filled and here's all these people wi disappointed looks on their faces, "We want to go and voice our opinion too." Well we were told at our council meetings that we're the people, so we brought them to you. I could have brought all of
Orange County down here and I swear every one of them would have come. I had to stop strange people on the street and say, "If I p your gas down here would you bring these people down to San Diego"?
They'd say, "What are you fighting"? We told them. They said, "We will drive our cars down there." You should have seen our caravan.
They're all over the hallway, upstairs, everywhere. We've got to bring them to lunch before they faint on us. So I thank you for opportunity to let me speak while they are still here. They're lovely, lovely people. I appreciate that. Thank you.
CHAIRMAN LOCKYER: Thank you. It's not so much a question as a suggestion -- there are many people here from Orange County have a particular interest in the issue, and of course it's not just a concern of that county. I would like you to poll your local legis lators in the Assembly and Senate and send me a letter as to what their views are. Have you already done that?
SHIRLEE EARLEY: Maybe I didn't mention the State of Cali fornia Federated Women's Club has adopted this. Have I mentioned that?
- 66 - I s d. rstand t. s e there are woul much to see a
e i s
I our n ion
we of s t us today. are s ill mee of rvisors s a ve close ati those n members I'd s are tern cing. we will have it for t
CHAIRMAN LO d be e.
PAT BLOW: am Director of i is a private group in Orange County consumer 1 s .
We are on a very small t. 've rece so compla s about the ce stores, item lC t bei g
eir b pe 1 be 1 0 ri t price, ' managers tell pe le if t can just go some- p ace else. r aid, are to lady, c i me"? said, " But we t la s we d it would be r r 0 legislature an to t 1 la s . Daniel ster said e s a . of.
p les of 1 e !! f allow dge of p ces to be t s rt t it s me to select g t r,
I lowed ce p 0 f
on t man lat by a dictator (and a dictator does not have to be a man with a small black mustache, the entity of big business can be just as ruthless a tyrant) the only difference between se masses the masses that can make self-benefiting decisions, is knowledge. We're asking your help in our fight to keep the items we buy priced. Not just grocery items. We feel that department stores, hardware stores, drug stores, will be the next to lobby you for price removal. Once these prices from all these stores have been removed, you are leaving your voters open to price manipulation, and more importantly, greater inflation. Because once the stores can raise prices with almost no expense, they will do so daily. The trend has been for the government to aid and protect me in my right to knowledge. You protect my right for fair label ing, you protect my right to know the exact ingredients in a pro- duct (natural as well as chemical) and you have me legislation for disclosure of the nutritional value in things that I eat. Wouldn't the removal of prices start a new trend? Samuel Johnson said, "A desire of knowledge is the natura feeling of all mankind; and every human being whose mind is not debauched, will be willing to give all that he has to get knowledge." So you see, it's not just the 14¢ that we might be j ed out of at
the cash register that brings out such strong reactions to s issue. I rather feel that it's something deep within our ellect and our instincts that abhors the loss of any knowledge. If you can indure me just one more quote, and this one from the Bible. I would like to direct this to the members of the grocery lobbyists because we've heard that many of them are lawyers. "Woe unto you, Lawyers, for ye have taken away the key of knowledge.'
- 68 CHAIRMAN tual to
in the erest of e, s testi
i on si ite. e re strai none of members of e committee are 1 rs.
SHERRY BAUM: irman 0 c ttee.
My name is rry m Director of alition.
t December I rece a call r, iet Wei r.
She informed me state statutes item cing were
about to expire. I or 1 ied r statute back in
1977. She knew I was erested so I att d ar Orange
County where the coun was ing to t t a
local ordinance. I was stunned I a rmer er
of the Air Quality Management District ar of South
Coast Air Quality District. t accustomed to
seeing 1 sts wi big brief case of bo
and ask r var1ance r aws. e
outraged to see same k of sli e re
County d of Supe sors. I was s stunned at hi
pressure roach d went out,
bound and termined to a consumer t item
price I one so rme
one. It s called t umers al een act
e t cities the tee
t if I would o San Be c all I
to is set a t e iti
le d embrace me s 0 s some
thing. 11 We have compla d to s we written
letters. tried collect on e back or "we'll buy you free groceries." It's not worth it; it's too much of a hassle. This petition in this briefcase is full of ten thou sand of them and if you'd like to make copies of I'd be happy to do that. The reason I want to hold onto them is I promised every person who signed this petition I would noti them what this committee does and what the status is. But I'll read you the petition. "To all elected officials in the cities, counties, and the State of California: We the undersigned consumers in this state hereby request your support in passing all ordinances mandat ing individual price marking on consumer commodities. We are not opposed to automated checkstands, but believe the consumers of
California must be protected and informed. We are opposed to sunset clauses and any more test stores in this important legislation.
CHAIRMAN LOCKYER: Sherry, how many signatures d you estimate you have?
SHERRY BAUM: I have about ten thousand this briefcase.
As I said, the California Federated Women's Club have taken up this cause and I guarantee you they will be petitioning every state and every city in this state. They're very very determined to is.
I want to say something on behalf of these people gave up their time. You've been very patient with and we appreciate it, but this does affect them very much. It's bad to have suffered the indignity of having to crawl on the floor you're an elderly person to reach shelf prices. Or if 're capped and in a wheelchair. Or if you're legally bl it's necessary for you to hold that item up to your eyes to read it; that's bad enough. And the embarrassment of to hold up the
- 70 - line because re wer 0 or 40 items at cart and you can't remember what that can of as on t batt cost took it off e s If. t's but el you
elf. ciate ence. I want to remind you t t it's a cruel and unnecess e to ask these people to to o r stores to t em does not item p ce. spend their 1 ars to do so.
I'd like to t is to your colleagues in the State Legislature let s is how people feel. I guarantee you if you would ld in any other counties that other pe le would come out is too. Again, thank you for your t t
ASSEMBLYMAN IS: How do account the fact that
Adrienne Gaines us an example of a sto t next door, where it's a me ical, we 11 c 1 it, tore is auto- mated and people are st 1 to t do do that?
le 1 id she not s that was a scanner store?
LIS: s . ce removed.
SHERRY on i ems if recall.
See what ens it
S: 11 is e
re s
t not p ce 1 re es
AS IS: wel tems at can't be. 1 islat on t.
- 7 SHERRY BAUM: That's the specious out c produce because it's not hard to remember pears, it's 1 cans and packages that want to remember.
ASSEMBLYMAN ELLIS: Didn't we tions 1 potato chips and things like that? re's a b to it anyway, even without scanning. It just seems my
I have no personal experience, because I t f in my area that have a scanner, but why pe le would cont to to a place that does not have the price on it.
SHERRY BAUM: They may be capt s, sir.
ASSEMBLYMAN ELLIS: No, right next or.
SHERRY BAUM: The items that mentione not pricing are the exemption items, I've been told.
ASSEMBLYMAN ELLIS: Adrienne says no.
SHERRY BAUM: Why don't we all ar over
Ontario then or Sun City and see what ens f pe le that they have a platform, that they a t, as far as I know, know where to go.
ASSEMBLYMAN ELLIS: Well, I th est plat is the fact that you have two stores, side si
ADRIENNE GAINES: Your ta o ts, count style biscuits, your box soaps are not tion items. ot these items have been normally d a store. those items to see what type of re onse 're o ge
consumers.
SHERRY BAUM: Is there re can explain it better than I? I'm not be ar icu a
I just have a great deal of feeling for is issue.
- 72 - KEN STEWART: name is Ken ewart. In clari cation,
the items that were ment d by the young 1 95 percent of them
are items never been d a store.
tion s d that we could a cert wel a cert size
that did not have to be ; we're re to Kool-aid, ciga-
rettes, chewing gum, s of that nature. e has never been marked. ior to re ever be ar r items should be marked or not be d, we never as a clerk, a grocery
store, marked things 1 ippy dog od, Ti so , except in
rare occasions in low volume stores. Items were on ad were
never marked. Bis ts are a small, he overturned item. Most
the items that are not being marked at Stater 0 rs, in that par-
ticular store she ment d, were items that were never marked
grocery stores prior to state ordinance. I'm speaking as a
clerk who worked a store, not as a mana , not as
union person. I wo a store r 5 ars; I that we
didn't mark. I'm talk from personal
ASSEMBLYMAN IS: You're cont r 1 s
is essenti ly the t list, we d.
KEN STEWART: Part of her list is t t list, 0 r
parts are parts that were just never re were any scanners. re were i e s ore be
canners that weren't d. We went se at one t
where all milk pro s were not d. about a
two-year phase that were d t it's a waste f
effort to lf g lons o ice was ve
standard throughout e t So it was not a case of eve
day the price chang so d to er it. Any time there
- 7 3 - was a price change, the prices would be marked so s the customers could liarize themse s e st d items. 's a personal servation.
ADRIENNE GAINES: Then I d to s let s back to the beg of the corner oce sto e re absolutely marked and reason that e to the fact you had clerks who could remember 18, 0 s as a hypethetical number. items we're r s of those items have not been marked be re. I s llo, is a category, so you can imagine all various types of br the various types of flavors of jello are not d. dog food, as long as I can remember that I ve been dog, the items have been marked. When I o an ta store that dog food is marked, and I go o our sto we're not marking that. We're try to t a re ons cus rs.
I said earlier, that re onse has been ext 1 as a negative response.
ASSEMBLYMAN IS: Are you o c it i further in your plans? Are you go to start more o the staple items? ADRIENNE GAINES: A lot o our Stater s ad items and Stater saver items are a lot o e tems.
will take place, en again our i OS base sumer acceptance.
ASSEMBLYMAN IS: If f t and volume falls o ADRIENNE GA S: 1 b
ASSEMBLYMAN IS: You go b to tem l ?
- 74 - e
s e
t tore an
1
1 advertising and the television and the give-away at Ralph's. Eve store who has said, "We will give you the product if you find a mistake," you had to bring the package to er. couldn't say, "Oh yes, we've made a mistake, here it is, it's yours." It was, "Go find the manager, we'll call him, we'll do this, we'll do that." Twenty minutes later you got the product free, but you had to be persistent. I personally sent a customer back into the store at Ralph's who came out and complained. It was twenty-five minutes from the time she went in until she came out of the store with a 69 cent item. Sure she got it free, but who has that type of time? I think the discussion should be, "Is it neces sary for the people to know"? I tend to agree Pat Blow, know ledge is an absolute. When I get my groceries home and I put them in my cupboard, I compare them to the groceries that are already there. I only know then that the price has gone memo is not so good that I can walk into a store and say I paid 69 cents for this last week or last month. I know it I put it on the grocery shelf. I also know that if the items are marked, t we have a tendency to be more frugal with the expens items. children are taught that it is an expensive item. can tell by the price mark on it, not by a c register rece t stuck a drawer somewhere.
There are hundreds and hundre of reasons e eery industry or any industry would prefer us not to tomorrow what we paid for something yesterday. I if we b it yesterday we should know tomorrow by looking at product. en sive items are marked clearly, careful g a lot of to each product you buy. When you buy your groceries, th 're
- 76 - bought from necessity; when they're used, if they are inexpensive, they are used much more frequently. We have a tendency to eat more baked beans than we do steak. We know there is a cost factor. But between jams, apricot jam and peach, we are more careful if we know the cost to tell the kids, you make it out of apricot jam, son; it was cheaper. Our dollars must be carefully allocated throughout the week, not only at the point of purchase. We also would like to look at one other factor from the Retail Clerks' Union viewpoint, and that's "feather bedding." I think the one thing the lady did say that was absolutely true, not that she didn't say many things, is that labor has increased, not decreased. We are not concerned that we will lose people from work, because we know any system that creates business, with item pricing and the computer, will create more jobs. So that is not a factor. "Feather bedding" is a term used by the railroads when they had someone sitting around doing nothing. Clerks marking products so the consumer is aware is not
"feather bedding."
CHAIRMAN LOCKYER: Are you from the Retail Clerks?
KEN STEWART: Yes, I am Mr. Lockyer. I'm Director of
Membership Services for the Retail Clerks. If the committee has any questions I'd be more than happy to respond.
CHAIRMAN LOCKYER: I guess not. Thank you very much.
We've had four people from the coalition or associates testify. I want to get Mr. Dave Woods to testify before he has to get back to work.
DAVE WOODS: My name is Dave Woods. I'm a programmer analyst, which means I analyze computer systems and write computer programs. I've worked on the financial computer systems of a major
- 7 7 - aerospace manufactur rm a b a process art- ment and as a data processing tant. 'm current part a team wo on a contrac manu
turer. So I've worked a lot of ems. I am currently a Master of ience De e s tion systems. I'm also a consumer about SO cent of in I'd like to ta about s b cause computers are being used at the che st I i s the simplest most straight forward and least cost me d to allow a consumer to che the price be t being expected no matter method of i used. are currently three checkout methods used e method that does not require a computer, r enter price 0 t c erized checkst me d uses a code number into the computer r
code and it enters it 0
checker enter the 0
numbers. With bo se me ds 0 numbers entered to find r t legislation the local area has on scanners. The stores
on the item, have a s lar s t of anners; you're per rm same
item icing law ld es 1
checkout where the price is te d er the checker.
- 78 - ASSEMBLY~ffiN ROSENTHAL: Are there very many of the markets
that have computers not have the.
DAVE WOODS: There's one called Price Club that uses a
code number on all their items. They don't have item pricing and
most people shop there in spite of that because the prices are
lower.
ASSEMBLYMAN ROSENTHAL: I see, but that would be the
exception. You suggested something in terms of legislation, which
I intend to do something about.
DAVE WOODS: Any item pricing law should address all the
methods of computerized checkout which is where the prices are
determined by the computer rather than the checker. That would be
a case where if they put a code number on an item it's either the
UCP code or a code internal to the store and they enter that at the
checkstand rather than a price. No matter how they do it, the
checker enters a code number rather than the price and the computer
determines the price from that. It's used in several chains right
now. One is only using it for their generic brands and they're
expecting to expand this throughout the store, not using the scan
ner yet, but having the checker enter the numbers. This way they • feel they get around any item pricing requirements that are in law in San Diego County right now.
ASSEMBLYMAN ROSENTHAL: I'm aware, for example, when
scanner does not read the item, that the person at the cash regis
ter will insert the numbers. I've seen that happen a number of
times, but I wasn't aware of markets that had no scanner who had
the computer.
DAVE WOODS: The Price Club uses only code numbers on
- 79 - their items. There are two or outl r
e discount st of me se on number. That code er is d t from e much the same goes to the central c
d at po r i occur in situation as occur one 's using it on r generic 1 expand it into other areas of store us c they determine for an item vi scanner equipment r all
There are some computer -t e
I'd like to talk out. I ve
t industry o cial,
out how consumers d e sure coincide with the computer bar c s be times when a store d
got to change s lf it's
central computer would scove of day." Does is s s
rout legs
most likely is
11 have to initiate
lOll. The c er won't
ers are total s c exactly how to do eve told to do, right or caus direct r no to a1 s
e Transient
1 c
one o
rror c
a
t
1 . d.
n stores s error t scanners, is is sort of a sle on part of a s' once, if a a ent person enter
central computer of e store be
rent
onsumers
iles. 're
item, one error f t
pe e.
er fi 7 of rs
t
out 20 - 30 rcent 0 e
0 ac e
rocess a a be of 1 p rammers ana tates are
loyed to correct erro s pro ent
- 8 a lot of people, I don't know exactly how many pro rs are currently employed, but according to industry figures 70,000 new jobs r programmers and analysts ar. means 35,000 new jobs just to correct errors a o gramming. I'm sure that scanner systems are to be s ject to the same sorts of computers errors that plague 0 r a processing type application. the last ars we've d this problem. There's no foreseeable way to get rid of se the near future. A price charge might be di rent consumer was led to expect by a shelf tag for many di reasons. These reasons fall into two categories· A error and a human error. As I said before mach error is out in a million chance of happening. If it did, the price stamped on the item is the easiest way to check it, catch it, teet it, and correct it. Human error could be of several es. consume could be reading the wrong shelf tag for tem; lf could be under the wrong area, it could be just total the wrong spot at a shelf tag, they could be re or it could be located in such a way that it can't f ri one and are assuming that this tag applies. c er item co price could have been changed without a corre f change. The shelf tag price could been a corresponding computer item change. It d data to change the shelf tag or computer item co could be entered incorrectly into the computer. So s lf t pr1ce 1 agree with the price that's actually charged er, it may not be what is advertised for that item because ent red the data wrong. The program that returns a price a er
- 82 - item could be written incorrect et it up to three items r 29 cents where it's normal ten ents a piece. Normally
of 10¢, d ct to be d if ' 10¢, 9¢' and 10¢ to make a total of ee 29 cents plus one
r 10¢. It could 10¢, 10¢, 9¢' 1 ¢ e out all your savings depending on p is wr en. It's just an error programming, it all t t's t 50 per- cent of programmers are out there tised specials
have been entered orrectly if at a 1.
I was a store in isco area about midway through a seven day sale on an item. I went a t speci cal to buy that item. I t a 0 r I needed that item.
It was chili. We were going camping I wanted to stock up on it. The item that I was charged at the stand was the normal price, which was s on s to the normal price shelf tag was a sale price s If a saying item is on sale for s and d out it was charged at the regular price. i is gave me
item r free like I was told we to and sai th would correct the item. s was on t th day of seven day sale. I went b seven to see if they
ed never t was be
b t another can. It was d at the regular
rice. They had never b rlce, so duri
t seven day sale on item 1 b it?
?
CHAIRMAN LOC This was a scanne it
- 83 - DAVE WOODS: It was a scanne tor reca 1 whether the prices were ac ly on i not.
RMAN ! s s
WOODS: It was a Gemco s was about a year and a lf been effected by is t to believe by a lf t sale ice g price. A ty memo i most f perfect might remember b ices right." It might e d pe lS a sale item and I a when I got to the st II won't complain, like I ve ard stated, people that just won't notice. assume s e a price on the shelf s don't che Tho us of 1
1 price change that I i ..L e at that in could have been error on s tried to put the price it went maybe they just neglected to t to it was on purpose, it could easy for a consumer to t ct
icing is used, but relat
items ce
etween shelf prices and er ices, tives a journal I re itte
sociated Grocers in attle survey of one of their stores. st s 1
4 items in a store and 164 were t item ice that you
would get at the t was rent ice d on
elf t
is error of
out st
person. No one e
lf tags 1
accur is misleading. I alre
consumers that their big otection is
a descriptor display at a
that lists item names prices is
read the contract on er si it, is not
t kind of situation t t most consume li o be when 're
si a contract. ave t are
s "I want to se items at re to
charge." Also, if you ever out name s
11 be on the rece t e, ten 0
letters on a normal rece t t e. are to tell
1 name and size on ten or 1 1 s If want I the prices and ere wasn't l em would
the items ag store on 15 le ter
tion so that you can out store?
us le for rechecking e store, names ld prob
be 60 to 70 letters or more 1 i ld re re
eceipt t ab as wi as an ' b 1 et paper
s that is about 80 acters ten cters per inch.
That would make the cost of t more an
- 85 - savings due to the remov of item ic en 0 lette on the receipt tape would so be near s use at
ent and contro ice was recommended in a b I re I example of some of them; 7 G/ is? I don't. There's another one s no size). I can't compare b only told it's apple sauce I am be cents r.
Car can milk (Carnation canned ) if e t c rrect
I'm not sure I am interpreting these correct to abbreviate to fit it i of a ten to 15 those abbreviations are ve hard to fol s of the big things they say is ing to be lac tern p 1c and I don't think it works.
There's some o r problems completely convert to not us item ic to loss of it's scanners. is d be down, power blackout, or brownout, or bre tion system that communicates between
tands. Any of se could lete s store and result consumers who al ea 1 shopping items, having to to some o r
're totally out of ss le lS b out of business until lem could be e brought up, power restored, tever. s
ually ey say the ter 11 e co but my experience with er errors i few minutes they're go to t e six 12 s
- 86 - days, a we t re
it s been store b s . If e
p ces ar unle
e store writ l
pe son. If item 1 ge
r le pr l 0 to
losed h or 0 se. se. t
if you are in an asis. r convenience
middle of shopp is went a at t
r item pric d cover
We're not dis at s
ave companies a lot I $7
100 000 s s a ar i one er e tot s. c writi s s journals
ter of t
so e total s s
1 i ed because f 1 r 0
ents on a $100 would e 11 to p
item price
re was a st
s .
e to
he t s ' result more s just s t is t s f
- 87 say I've got more work to do? Perhaps. They s re's an item given free if the error is identified. How pe le t identify the error that has been titutiona it into the computer? All retailers are st. s e- ment that was made. I'm not saying all retailers are to be dishonest. All it takes is just one. consumer gets a re
How many didn't? Somebody said consumers are con ed t e prices on items; you go to a shelf, you look at cans of peas, and nine of them have 22 cents and n of t cents. I don't find that confusing. I've never found t confusing, they've always bought the 20 cents tern. 1 to make up for loss leaders. They stated waul
Okay, they might not. It would only require f es of com- puter time to change every price in the store. I could wr te a pro gram probably in half an hour that d fi e f al prices and identify the loss le rs, e mate of losses would be and ra1se the pr es on eve make up for those prices. Th say it won e f r nothing there to check, what they s now es not ne s ar1 that that's what's going to happen later. s been raven l all other consumer instances. 's law s 1
For consumers to ls re, i
example was Safeway and Stater Bra rs. St s' f I understand some comments, te r r
red to Safeway. So people up r sk f
1ngs charged higher than e from what they expect to gain overall s s be
identified in San Diego price surveys lS one f
- 88 - higher in the San Diego area, as as 11 d ices.
I can see where it mi be at Stater Bro d be lower.
as to turers of s c
s s estimates lementati rs, general
'11 the compute turers e se s s
t can identi can on se items
are actually related to use of s anne elated items
s as pricing of items store. exact
how much money is go to be spent on an l basis to
prices on items in a g store. statement was that some
savings with scanners, s stantial s s itional item
pricing. I think I already a ssed t t fi s
saying that the substantial savings are us scanners not
removing the items. Remov the item p ices results out
25 percent more sav s
I that out cove t
stions?
ara ie as t e ed to tes
perhaps one or two o rs. s • talk en see where we are terms
- 89 - MARY SOLOW: The sumer Fe ration o a i rnia we comes this occasion to come before your committee to it our comments regarding a resumption of state laws govern t g c
My name is Mary Solow I'm sident of t sumer
ifornia, a statewide fe ration of or izat s representing about a million Californians wo f pro ams with consumer protection. 1980 marks the fif ar. e 1 75 the consumer federation has been battl r permanent rotection for customers shopping supermarkets us ec ron system. Since the statewide law was ttl ttee
Sacramento last year, we've been crisscross g t great sta e ours asking cities and counties to t te t their own communities. Many of them have done so t , I believe numerous cities and counties have adopted own otec laws. Furthermore item pric o s ar cussi
other communities. The concern of 1 of protective laws in this arena en I as community after community s t own local laws. And over and over a s s
I have heard local offic ls ask t state a
item pricing law. I'd li to comment br fl s it about one of the local ord es a t
c has adopted permanent item ic g, al g test to permit the indust to remove t i f p ges in 15 stores and test lf e 1 e wi h the electronic che ut stem.
awaited test in the Los les area. A n mittee, made up of three 1 r, e t
- 90 - r resentat s, was d ee te
commenced ri La
r 1st of next
t comm ttee. r t e
must s at this s e
customer a
h still can b pe
someont~ t an a one ron . i • ease penci s and t t t to 1 ly mark t own grocery items. Customers can voi e t t
automated chec ut sys em test
laint form near ea t a
approved after be fi led out t t
ic 1, to be vali ted and t i e l
it f rm s res
t k to ove s c e e
rt be aro of 1981.
I'm concerned a i t
t to test t ut It
a st all burden on t citizen 0
ill out a card, f s 0 e f 0
t card 0 the mail.
a blem sto
st two or ee stores t s
d 10% f the e le t
so s to s rt t s
t to go back to ice
allowed to be ac s s of Los Angeles. Only three questions are asked of the customer: Is the price charge different than the price on the product shelf tag?
Is the shelf tag missing on an unmarked item and is rece t tape difficult to read? There's really no room for a itional comp a and I don't believe that there are any plans to check out any ot r source of consumer complaint in the markets. e 1s in this test, no testing of consumer preference. This has been made clear from the first, that industry is testing itself on how well it can perform some services in the mounting of this test, but it is not necessary to test consumer opinion. This has been the attitude of the indust unfortunately I think from the very commencement of this test. I think that consumer attitudes toward item price marking the re- moval of them is essential.
Over this past weekend, just to get down to a specif example, I shopped in one of the test stores to base a good portion of my Thanksgiving supplies. I needed a 1 amount of can goods which I normally do not buy and saw many ot r consumer doing the similar shopping. The cup with the ease pencils the test store was empty. There was another the ot ent to the market, but it was put around the corner so t re was no that a person entering the store could find a ase pencil to rna that. I watched maybe fifteen to twenty people go g there was no way that anyone looked anywhere near where pencil might be displayed. Needing so~e diet cola I saw an end of aisle display and there was no price on the items at all too several clerks to give me the information I nee d. I procee d with my shopping needs, I selected a package of all purpose flour.
There was no shelf tag on the shelf. Some greml had preceded
- 92 - me and peeled it away, I suppose, if it en t e t first place. Because I had so many groceries by the time I un- loaded them on the conveyer belt, f of items already been rung up. Because there was a 1 1 me I carted my groceries out to the car and sat do~m to check purchases. I did find a mistake, a small one where the cle me one product when it was another. I took my rece t c store, stood in line to see the store manager, and then s ac anied by h around the store as we checked out my c la ts--t miss shelf label, the missing grease pencils, the overc ge, I got my money back and I got my complaint idated by t mar t. It's now re to be mailed in. So actually the supe t quite a bit more on here than the consumer does to have a la t made valid.
But I'm still concerned that the shelf price t can be t ered with, and cans can be the pla e t s
Any time lag in the print g distri lOTI of lf 1 1 can affect the accuracy of t shelf ice. consumers
en short-changed when e store i ed t e spe a
computer. I don't want to go over a reasons r item pricing. I think they've been out be re some detail today. I do bel t t t f 1 ar ices on items is an essential part of t s ess. It's s
hat each consumer wants, and needs is to p the 25¢ per $100 of transactions of whatever it's g to cost. We th i 's a necessary protection so that we can k a le on our transactions. What I've real been t 11 u to
I know that the great of lifornians a me, is t we consumers want and need prices to on th the
- 9 3 - sal 0 t c
we want item 0 d s c t out a r comm tee will r eg
s
l s state ar a s e t ed pe store cha some
re $30, r potential of $100,000 I heard mentioned to I would po t out that when we have the kind of store that uses the scanner tee lo today we're talking out a store IS g 8 to 10 mill 11 business and I would like you to consi t the percentage is of the cost should it fall anywhere in the e of se ices we've heard, the cost of labor. bertson's, Alpha ta, 's; Mr. Alanbar of Ralph's said 60,000 a store. is a tiny percent e of one percent and I think that the consumers of California have made it clear that they're willing to p t small amount in r to be able to read packages and cans wi the proper price. Earlier a representative of the industry said, "If this is a labor issue why not in the normal collective bargain process, t k it over and not make it one of legislation?" We don't think it's a 1 or issue, but just for the record and for fun, we brought up idea of negotiating something about item c or some the jobs lost in the scanner technology we en 1 out of the room. However, if I heard the r resentative from Stater Brothers saying that her company is now re to start ga and negotiating on item pricing, we're deli ted th tion and we'll take it into account. Because 've me s these things to you so many times b ore, I k I would bore with the reiteration of the test you've ard be re I want to thank you for the opportunity to ear be re you tience in listening to our testimony. ank you.
BARBARA FRIEDMAN: I'll try not to be repetit I will be difficult with everyone s en here. name is Barbara Friedman and I'm consumer representat tail Cl Union #770. As any job related impacts would on our membersh
- 9 5 - is cove ti e 25 of our contract is issue r res our ers as a consumer.
le f comments on s en cle demonstrated p lems t system is not aga st new e
e lo I'm sure tee it was ed in L. s t a
n s sa "75% of e scann system h to do with eliminating item pric g. ! s e i di f
us to understand that that's go to f sma ler stores, do about a mill llars a s
om ing a scanner, if t t 75% f scanner are going to noth to wi l
I think basically what consumers are l to
a ss like k of t won s ss would not have to go to the store, be p is exactly t t item actual t we're look for is a balance. t e pro t ity and use e benefits of a n
is we th a use d t
I wanted to s
rmation. The 's mvn s
rted the L. A. T s' I beli l t industry c te
ibi ts s
ink we're gett rro po t of view, and k of s
6 - at s
0
r
l
e 7
l
rmat c sume s ts.
t t
t
s c
0 find out shoppers' feelings on this issue and to assess how much shoppers use the item pricing information currently available to them. The survey was carried out in front of s e ts e- sentative areas throughout San Diego city and county. The rna food shoppers of families were interviewed and asked five questions. A total sample of 182 interviews were taken. The results clearly showed that consumers both use item pricing and want it continued. If you look on the copy of our survey you'll see that the first four questions were designed to find out how much shoppers currently make use of item pricing. In an approximate 2 to 1 margin, we have found that shoppers not only feel item pric g is useful but they use it in the store, at the register, and at home to make wise and informed purchase decisions, and to help cut the effects of infla tion. The last question asks consumers their feeling about the re- moval of item pricing. An overwhelming majority, 87.3% stated t they would indeed care if stores no longer stamp prices on indiv 1 items. This response coincides with a number of other surveys done both state and nationwide. The survey done by the New York Legis lature 88.8% of the respondents stated they would mind if item pricing was discontinued. The nationwide study by the U. S. Depart ment of Agriculture found that 93% of the respon~ents in stern region of the U. S. found food pr es on ind idual packages to be very useful, to extremely useful. In the same study when given a list of potential labeling information and other food shopping aides that could be available to them, consumers se ices on packages to be the most useful piece of information could
Another survey, which we're all familiar wi s d 92% of respondents in the State of California had an erest cont ing
- 98 - i g.
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e equipped stores with and without item ic ices at con- ventional stores and found there to be no more sav s scanner- ipped stores without item ic at tores. knowledge, industry has produced no statist a- tion on the potential savings that consumers cou re f item pricing was removed and the savings passed on to c sumers. e have given us no indications or assurances soever savings realized by them will be passed on to consumer rm of lower food prices. We've heard many vague assurances, none reassuring enough for consumers to be willing to ee to let tares remove all prices from items. Are the promises of potential sav gs worth the dangers in risks~ We think not. ds con were here today to tell industry, to tell our legislators, to el each other that we are willing to pay for item ic st won't even tell us the cost you asked t of them seem to be able to come up wi Supermarkets have shown that they compete e much by lowering food prices, rea and gimmicks to attract customers to t ir store back their claims up with gimmicks of re f p ces l can be found to be lower els re. CAL PIRG is well re ect San D od price surveys that we have been r of the most outspoken lobbyists against item 1 also came out recently in our food ice 7 out of eight food stores locally. sumers they can't lose shopping at the store, s with an elaborate refund offer. Our st d t te
- 100 - s
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s f r and scannerized. Consumers may go elsewhere now. They'll do it all together when they are all ready. There's safety in numbers. Consumers will then have no choice, they'll be forced to accept the prices-off-stores if everyone is doing it. In order for the competitive marketplace forces to function correctly, consumers must have a choice. There must be competition. One of consumers' biggest complaints about the removal of item pricing is not being able to tell if the cash register rings up the items properly. Industry agrues that for years many items such as produce, dairy goods, and miscelleanous items haven't been price marked. But an average market basket has 60 to 70 items in it. Consumers simply cannot remember correct prices for that many items; not a whole cart full of groceries. An industry's study published in the Progressive Grocer showed that very few people can remember prices, mostly because of the wild proliferation of products in today's typical supermarket. In this study of people's price knowledge of 60 staple items, it was shown that the only item that the majority, 86% of the people, could remember accurately, was a six pack of coca-cola. Thirty to thirty-nine percent knew the prices of a handful of products ranging from Camel cigaretts to Campbell's tomato soup. The best that most people could manage was a good general knowledge within 5% of prices on some commonly bought items. Before the hearing started this morning, we did a small test survey out in the hall where we showed people prices on 40 items, then went through them again and asked them if they could recall them, and had them fill out a sheet. No one could remember all the prices. I think one person got 10 right. Our nation is build on a system of checks and balances. Should the relationship between
- 102 - between consumer b di l em p 1 or itional s ti re t been a e . t ur eat at s a t de law on item pric to te t 1 s f i rnia. you. CHAIRMAN
a rtell I '
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APPENDIX A
ATTACHMe:T A I'
/ ·!jl.,."K / PO _~ . l! "/'
INTERNATIONAL NEWSLETTER NO. 115- 1980
The Universal Product Code {UPC} could be in the near future "a deathtrap" financially for the packaging conver ters who do not take the high required quality standards of • the UPC imprint seriously. According to Dr· Shelly Harrison 1/ of Symbol Technologies, today as much as 10~ of the UPC im \ printed items in the supermarkets do not scan properly. Already the seriousness of the situation can be felt with one large supermarket chain in Pennsylvania already an / nouncing to its food, etc. suppliers that if the UPC symbol does not read properly -on the store's scanner, the product ) will be rejected and the line banned from its stores. If II such is the case, the package supplier could be sued unmer v cifully. Proper test units should be available in every plant for approvals at start-up time and during the run by l both press personnel and quality control. The packaging manufacturer should make certain that his test equipment is compatible with th~ laser units in the various supermarkets. v We do not use this equipment and must accept the word of 7 v others that certain of the test units for sale neither per form nor relate accurately to the equipment at the market D place and thus, if this is true, could give unfounded com l placency to plant operated personnel· The last we knew there was only one laser test unit on the market. This is going to be very serious business and certainly should not be "shrugged off"·~ \ Bien-Cal have a missed plastic window detector that will operate, according to them, on a stra1ght l1ne gluer at speeds up to 60,000 per hour on windows as small as 3/4" wide x 1/4" high. The electronic device will- detect the presence or absence of the plastic film by scanning the lead ing edge of the folding carton and of the plastic window. A signal to the triggering head, not accompanied by the cor rect signal from the window scanning head, will cause an en ergizing of the output relay., The scanning heads can be moved for different job requirements and carton sizes. A good number of these scar'mers are successfully operating in folding carton plants and are a great assist in keeping cus tomer complaints to a minimum. For further information con tact Joseph Armour, vice president, Bien-Cal Electronics Industries, Inc., 1333 Second Ave., New Hyde Park, NY 11040.
E. Gilbert Mdthews, Ed.tor & Publisher Execuli•e Pubiical•ons Of. E. GILBERT MATHEWS lr.JCORPOPATED Bo1 429 - Gv• Ilord Cnoe flU >7 AI I ACHMENT B SUMMARY OF POLL CONDUCTED BY PUBLIC RESPONSE ASSOCIATES, INC. • A poll was conducted by Public· Response Associates, Inc. of San Francisco in September, 1979 on ~ehalf of the United Food and Com mercial Workers Union.
This scicintific poll tested tne attitudes o~ H06 respondents statewide, considered an adequate·sample by professional standards. Of those tested 49% were male, 51% female.
After first determining those who had heard of automated checkout systems using the Universal Product Code, several questions pertaining to Item-pricing were asked.
The results:
When asked what part of inflation hurt the most, rising food costs came first (38%), rising gasoline costs second (34%) rising housing costs third {18%).
Question: How important in the supermarket that items are in dividually marked with prices?
Very important: 76%. Somewhat important (16%) for a total of 92% considering this item important.
Not too important: '5%. Not-at all important: 2%.
NOTE---there is little variation in this response among people who describe themselves with various political labels. For example, con sidering price marking very important:
Democrats: 79% Republicans: 74% Liberal: 72% Moderate: 79% Conservative: 76% Male: 72%' Female: 80% L.A./Orange County: 77% Rest of So. California 82% San Francisco Bay area 69% Rest of Cali fornia: 78%.
Question: Is this statement believable/not believable?
"No matter what the supermarkets say now, once the new pricing_ system is in effect, they will find some excuse for not reducing prices""
Very Believable~ 57% Somewhat Believable: 30% Not Too Believable: 8%
Not At All Believable: 3% Don't Know: 1%
Question: If election were held today on item-pricing initiative?
In favor of initiative: 70%
A general summary would be that:
1. The vast majority of Californians consider prices on packages and cans in automated supermarkets as important. A huge majority (76%) feels it is "very important."
2. If an item-pricing statewide initiative were held today it would pass by a margin of 70%.
3. This feeling crosses all political, philosophic, geographic and age lines.
4. The people feel that whatever savings the markets gain by the new system, they would likely not pass it on to consumers (by a margin r-.-F Q7~) . APPENDIX B
I
Nov. 9, 1 1
,-.. -- --~,
0 "' . ~.. . "" ~ ' ' ·. '""') ...... /';"'{,,..: r,. '(,, .•.••' } (l (.J ,... .. -rp • • T ·1 I ·( I -.J ; ...... '-JlJ,Ll .. ~b --- ~.~.: \...... _/ J~GJJJl l T1Clng lrBdl 1 :I. I CC Consumer Grou]JE Cl1m'ter Buses To San Diego Hearing .I ~
By Cathy La\'/hOO wants the prices removed from the "The bill has to get out of commit "We want women's voices to be Rogtster Staff Wntur items," Earley says. tee," says Baum, "or we'll never heard," says Earley. "We're trying If hell hath no fury like a woman "TI1ey try to tell us it would save have the chance to fight for it in to organize all the support we can scorned, the Labor, Employment and money, but the Southern California Sacramento." get." Consumer Affairs Committee of the Grocers Association says it would Since the state law expired, several State As.semuly had better prepare save one-fourth of l percent of the cities in Orange County have passed Baum was in charge of rounding up for a fiery session Nov. 17. total food bill or 10 cent.s on a $40 tab. local ordinances requiring item the buses which were donatl>d by Re That's when the committee is con· For my money, they can keep the 10 pricing. tail Clerks Union Local 324. Her hus sidl..~.!...- .J::...'"-1,~!--!I:IIIllio.t.-t'i.U~..... ------~~ law, and at le41~t four busloads of professional relations for pharma Orange County women who feel they (\' · · 'I o vJant people to be able to continue cists and drug clerks, is a member of 've been scornt..'Seaport Village. practice and rely on the computerized prices plainly marked.' - Shirlee Earley lines, tJJrs and nur!JI.x:rs which can be The 7 a.m. pick-up locations are set deciphd by tion for the state fight. Earley says the issue all the way to the California by groc'"rs h..ts ddayed renewal. 'l'he Orange County Chamber of Com past successful CFWC campaigns Federation of Women's Clubs, which measure l!ils lJ<·~n S<~lll to committee merce directors, who calll>d the law have included fair packaging laws · represents more than 42,0ou women for further ~tudy. "a vicious assault on the free enter and truth in lending laws. statewtde. "Further ~tudy is ju~t another way prise system." "If we were successful there," she As chairman of the consumer af of sending it to die," maintains Ear On Nov. 17, the Committee of Labor, says, "I see no reason why we fairs for Orange Dbtrict CFWC, she Icy. !Jut she and Sherry Uaum uf the Employment and Consumer Affairs shouldn't be here." persuaded tile state board to make Orange County Cow;umer Coalition will de-cide whether or not Additional information about sp<:.' renewal of item pricing one of its and l'at lllow of Coll!>Umcr mend passage of an item cific bus stops may be obtaint->d The pro;e<:t was adopted in intend tq resm·rcct it. for the entire state. the Consumer League in Ir Harrictt re-commendation, action on the mat vine. The number is available from "I haven't talked to one woman who ter would cease. dire-ctory assistance. ·------·------• EXHIBIT B
ORDINANCES AIDPTED
I. Characteristics of the various local ordinances that have been adopted: A. The ordinances adopted generally break down into these categories:
1. :t.bst only apply to grocery stores equipped with "scanners", of these:
:t.~jority are patterned after the original San Francisco ordinance which allows fewer exemptions than the former state law, and require price marking of sorre items that are not usually price marked in non-scanning grocery stores. A few are similar to the forrrer state law, e.g., Garden Grove, Orange County.
2. A few apply to all grocery stores within the jurisdiction, e.g. , City of IDs Angeles, Contra Costa County.
3. A few permit testing, e.g., City of Los Angeles.
4. Oakland exempts "Minimal Service Grocery Stores" with scanners from the item price marking requirements. These stores are defined as having "store~wide average prices at least 20% below regular prices normally charged by chain retail grocery stores . . . ''
II. Over one-half of the 72 local jurisdictions which have adopted ordinances do not have a scanning store within their boundaries. This shows the over-responsiveness of some local governmental bodies to union and consurrer activist pressure. In many cases, ordinances were passed without knowledge of the food industry.
III. Groups responsible for the widespread adoption of local mandatory item pricing ordinances.
The Retail Clerks (now the United Food and Commercial Workers Union), and to a lesser extent, the State Departrrent of Consurrer Affairs, at state expense, and some consumer groups. Apparently the Retail Clerks prefer to pursue their goals in this respect to this issue through governmental action rather than through the collective bargaining process. They have never argued that any existing retail clerk member \vould lose their job if item prices were rennved. Present union contracts provide their members this protection. EXHIBIT C
THE W\NDATORY IID1 PRICING ISSUE mCALIFORNI8 JN PER;PECIIVE 1980 EST. SALES NO. (IN MILLIONS)
FOOD STORES 22,400 $25,01) 100.0
I. SPECIALTY 1 C(}JVEN IENCE & SML\LL GROCERY STORES 19)200 5)000 20.0
II II. SUPEWARKETS - TOTAL 31200 2o,cm 80.0
A. WITHOJT SCANNER; 2,840 16,400 65.6 B. \1 ITH SCANNER> 360 31600
1. SUBJECT TO LOCAL ORDINANCES* 188 1,880 7.5 2. NOT SUBJECT TO LOCAL ORDINANCES 172 L72Q
A. SCAN~I~G SIORES CONTI~UI~G TO IID1 PRICE 77 770 3
BI SCANNING STORES wITH RrnJCED IlEM PRICING ** 95 950 3.
* INCLUDES THE 17 TEST STORES AUTHORIZED UNDER SEVERAL LOCAL ORDINANCES
** REDUCED ITEM PRICING MEANS : ~b. OF ITEMS NORMALLY PRICE MARKED IN A NON-SCANNING SUPERMARKET 75-80% No, OF ITEMS WHERE PRICES REMOVED 35% No. OF ITEMS STILL PRICE Ml\RKED 40-45%
,,_, van -.~oso. \.. ..tn•.vlilio J.J I, .... County of Santa Clara 299-2105 Area Cooe 406 -. California EXHIBIT D EMAiuSA En"lromenlal ManagemenV Gen•ral Services Agency November 4, 1980
Mr. Ron Holley Director of Real Estate Alpha Beta 999 Montague Expressway Milpitas, CA 95035
Dear Mr. Holley:
You a.sked about the experiences of the Consumer Affairs Department as they relate to the accuracy of scanning systems versus manual check-out systems.
This department routinely inspects those automatic scanning systems in use in the county. We do not hav~ a routine program for the inspection of manual check-out systems, b•xt have recently conducted a survey to determine if consumers are being overcharged on items advertised at special sale prices.
SALE UEM SURVEY
Thirty-two stores were shopped by department staff from a list of twenty items pre-selected from newspaper advertisements.
If the items. were marked at the sale price they were not purchased (the assumption being that they would be "rung up" at the correct price) • • If the items were not marked with an item price, it was purchased. Of 161 such items, we were overcharged on 4 (2~).
If the item was marked at the higher, non-sale price, it was purchased. Ot 94 such items, we were overcharged on 37 (39%).
The Consumer Affairs Commission has. reviewed this survey, has concluded that the mis-marking of sale items is a serious consumer problem7 and has recommended that the Board of SUpervisors pass· a sale item price ordinance. The proposal woul~ I require that 1 when an item is marked with a price, it be an accurate price. The proposed ordinance. applies only to stores which do not have scanning systems, and does not re~uire item pricing. ·
SCANNING SYSTEMS
The department routinely inspects. the accuracy of scanning systems. Numerous items oe m~chandise are. selected from various areas in the store and the items are passed ave~ the scanning light. The prices charged by the scanner/computer are com pared to the advertised prices, the shelf prices and the item prices. Any discrep anci~ are noted and, when necessary, enforcement actions are taken.
An EQual Qpportur.ity Employer EXHIBIT D (CoNTINUED)
To date, there have been very few problems and enforcement actions have been limited to the issuance of Notices of Violation and, in one case, an informal hear ing with the store manager and a deputy district attorney.
CONCLUSION
I have to conclude that a properly operated scanning system is much more accurate ~han the older manual check-out system. Scanners also offer easy control from an enforcement standpoint._ It is not neces- I sary for the weights and measures· inspector to identify the "good" checkers and the "bad" checkers. The inspector need only check the system--and the system pro vides a detailed document (the sales receipt) which is excellent evidence that the system is (or is not) being operated properly.
Sincerely your{) ~uJK Daniel R. Smith, Director Consumer Affairs Department
DRS:gh
..
•
APPENDIX C
COUNTY OF LOS ANGELES DEPARTMENT OF CONSUMER AFFAIRS
B-96 HALL OF ADMINISTRATION , 500 W TEMPLE ST ' LOS ANGELES. CALIFORNIA 90012 (213) 974-1452
SHIRLEY GOLDINGER MEMBERS OF THE BOA.RD Director PETER F SCHABARUM KENNETH HAHf~ EDMUND D. EDELMAN November 14, 1980 JAMES A. HAYES BAXTER WARD
Chairman Bill Lockyer • Assembly Labor, Employment & Consumer Affairs Committee State Capitol Sacramento, CA 95814
Dear Chairman Lockyer:
We would like to have the attached become part of the record of the Assembly Labor, Employment and Consumer Affairs' November 17, 1980 Interim Hearing on Item Pricing.
Thank you.
Sincerely, LL~/J.-~7L~ - Shirley Gold/nger Director
SG:gs
Attachment The Los Angeles County Department of Consumer Affairs is responsible for providing consumer protection information and consumer complaint hand ling for seven million citizens of Los Angeles
Consistent with that responsibility the department has opposed and continues to oppose the removal of prices from individual items in supermarkets as not being in the best interest of consumers' "right to know".
In April, 1980 1 the Los Angeles County Board of Supervisors demonstrated their concern for consumers by enacting an ordinance requiring that prices be marked on items sold in supermarkets within the unincorporated area of the county. For purposes of experimentation, one supermarket was permit ted to remove the prices stamped on the individua 1 items. To date, that store has chosen not to avail itself of this procedure.
We do not intend to repeat a 11 of the arguments that have been raised to support the need for legislation rna nda ting the continuation of item pricing • These are a matter of record. We believe it is important however, to make you aware of concerns expressed to us by consumers and we therefore sub mit the following letters for your information.
It is noteworthy that the complaints consistently describe receiving a refund of the difference between the correct price and the amount of overcharge.
Not a single consumer received the item free, de widely publicized claims by supermarkets that, in the event of overcharge 1 consumers would be given the item in question free.
If the markets fail to honor their claims during this perio::l of experimentation and close scrutiny, what may the public expect in the future? Clearly, con sumers have every right to view industry's promises with skepticism.
We believe these letters are a reflection widespread frustration and unhappiness at the prospect of removal of prices from grocery items. We urge your committee to give the widest possible opportunities for California citizens to express their views on this subject.
Thank you for the opportunity to have this statement included in the testimony. v l· • v I FOR OFFICE USE ONl V
'CASE NUMBER COUNTY OF LOS ANGELES DEPARTMENT OF CONSUMER AFFAIRS 500 WEST TEMPLE STREET, B-96 CATEGORY I 3 {! ~- A LOS ANGELES, CALIFORNIA 90012 DATE OPENED------ (213) 974-1452 ASSIGNED TO------
COMPLAINT FORM OFFICE ------
INSTRUCTIONS: FILL OUT BOTH SIDES OF THIS FORM. PLEASE PRINT OR TYPE. ATTACH COPIES OF ALL DOCUMENT~ (CONTRACTS. RECEIPTS. CANCELED CHECKS. CORRESPONDENCE. ETC.l. DO NOT SEND ORIGINALS.
CONSUMER S/0 __
, 1':
:~ NAME SALESPERSON OR REPRESENTATIVE
ADDRESS: NUMBER STREET ADDRESS: NUMBER STREET
CITY STATE ZIP CODE '
JY&/ELEPHONE: HOME • :J/J) --~· . TELEPHo'NE: WORK DATE OF TRANSACTION ======~======~·~·-·~---~ DID YOU SIGN A CONTRACT OR ANY OTHER PAPERS? YES 0 NO IF SO, GIVE THE CONTRACT, INVOICE OR CHARGE ACCOUNT NUMBER AND ATTACH A • COPY OF THE DOCUMENT. CONTRACT/ACCOUNT NO .. HAVE YOU CONTACTED THE BUSINESS REGARDING THIS COMPLAINT? YES 0 NO [J SALESPERSON on REPRFSENTATIVE CONTACTED: ------DATES
HAVE YOU FILED THIS COMPLAINT WITH ANOTHER CONSUMER PROTECTION AGENCY? YES NO IF YES, WHICH AGENCY? 0 0
DO YOU MAKE PAYMENTS TO A PARTY DIFFERENT FROM THE cor.1PANY on RUSINESS YES NO YOU HAVE FILED THIS COMPLAINT AGAINST' IF YES. TO WHOM?· 0 0
~-----
HAVE YOU RETAINED AN ATTORNEY TO ASSIST YOU lr4 RESOLVING THIS t.IATHR? YES 0 NO 0
------~
HAVE YOU FILED THIS COMPLAINT IN S•.IALL CLAir.~S COURT? YES 0 NO 0
DOES THIS COMPLAINT INVOLVE AN ACTIVE LAWSUIT OR OTHER LEGAL ACTION' YES 0 NO 0 -----
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' -.- ~..-.-.; i;"'· t 111 '-II l:'tti[•OP COU,'W 25 CF: T,lTo";l ..,.. .j( , .... 'l ...~i-1 r.-,..,,~, 1t1 ft7 r.;'.. ' r..;t'-- FOR OFFICE USE ONL V • CEIVED I ocr 2s PH 2 Sd !CASE NUMBER COUNTY OF LOS ANGELES DEPARTMENT OF COO_~I}o?~J3!~~1~S CATEGORY______500WESTTEM~~T~ . F LOS ANGELES, 0Cil~FD711'H-.,.,. lr DATE OPENED------ (213) 974-1452 . ASSIGNED TO------ COMPLAINT FORM OFF ICE ------:: INSTRUCTIONS: FILL OUT BOTH SIDES OF THIS FORM. PLEASE PRINT OR TYPE. ATTACH COPIES OF ALL DOCUMENTS !CONTRACTS. RECEIPTS. CANCELED CHECKS. CORRESPONDENCE, ETC.). DO NOT SEND ORIGINALS. ~ONSUMER SID __ COMPLAINT AGAINST SID I . ~- . . AME SALESPERSON OR REPRESENTATIVE --~----~----~ -DDRESS: NUf\.IBER STREET :tTY STATE ZIP CODE CITY ~~-·------71P CODf ----- ,------~ ------4 ELEPHONE: HOME TELEPHONE ------·- ~ _c9=-----"---'~...... ,L.-<..-..L.--1'>-I---,'-,·~I.__..UQ - ELEPHONE: WORK DATE OF TRANSACTION liD YOU SIGN A CON fRACT OR ANY OTHER PAPERS? YES 0 NO p{ r SO, GIVE THE CONTRACT, INVOICE OR CHARGE ACCOUNT NUMBER AND ATTACH A .OPY OF THE DOCUMENT. CONTRACT/ACCOUNT NO. . . __ . __ "'-:___-scct..-;>-.~t ~ CJ/'L-L- ~...-rn-~ p~ .( ~ .£<:l) ~ n r• 1AVE YOU CONTACTED THE BUSINESS REGARDING THIS COMPLAINT? r J. ·YES ~__A ~> _J ·'~EfPERS9['l OR ,REPnE1FNTATIVE CQ!'!.!A}iTED: -~ • ··~---r-- OAHS ~~~ --~-~(.. -~ Ju - C.th.. £.cJ£.LtJ...L~.i,.L"::f.)..~ _ _ -,.D....<..c.t~-\.yf-_~.(_-/Yb.... (.:vl -cr1 t... 1 - --- •" -·- - ~~ - ::> YOU r.IAKE PAYMENTS TO A PARTY DIFFERENT FROM THE COMPANY 011 UUSINESS NO OU HAVE FILED THIS COMPLAINT AGAINST? IF YES, TO WHOM? YES 0 .tl ·AVE YOU RETAINED AN ATTORNEY TO ASSIST YOU IN RESOLVING THIS f.IATTER? YES 0 NU ~ - ;,vE YOU FILED THIS CQt,IPLAINT IN Sf.IALL CLAIMS COURH YES 0 NO [:f ------~ OES THIS CO:.~PLAINT INVOLVE AN ACTIVE LAWSUIT OR OTHER LEGAL ACTION? YES 0 f\0 rsr ------AS BAIEf-L Y AS POSSIBLE, PLEASE DESCRIBE lHE DETAILS OF YOUR COMPLAINT. INCLUDE NAMES OF INOIVIDUALS AND OATES ------~------ ------WHAT DO YOU CONSIOEil A FAIR NO 11EASONABLE SETTLEMENT OF YOUR COMPLAINT? I ~ r-r: • z';; Ill ,;d:i.J ·~ ~- 02Sd_ .ae.e~/~_L~.S _UL LL- - ~- ~------ ------ READ E FOLLOWING BEFORE SIGNING BELOW: I CHHIFY THAT THE INI'OnMATION CONTAINED It\: THIS C0~.1PLAirJT /\NO ALL OF 1H[ INFOf:?.IATION 1 HAVE Cl\' !'\ li COf1RECT AND COI.lPLE TE TO THE BEST OF MY KNOWLEDGE. 11; OHI:Jt:R TO RESOLVE t,h' COUPLAINT, I UNOEilSTAI>~O A COPY OF THIS FOH~.~ UAY BE SfiJl TO THE CUSIN(SS 01\ ~ llfO HilS C(Jr.~PLAINT AGAINST. -,- -----.----~---:.A3_:-_Lf:a ______SIGf~ATURE. DATE SIGNED 00 ~.OT FORGET TO INCLUDE COPIES !NOT ORIGINALSt OF ANY DOCUMENTS. ocr, 1 FOR SUPER UALUES SHOP HT RALPHS MEHT . 6.1~ SH ,..r:-'l"'f'' .. ' I "·do~. rr SCALlop&_ ..--e- ~ HARtl ~l£s .'· i'.f?r GROCE ltV- tt · '2. a·~ " I ~ CHILI P.EkNS . .2!JLJ CdiL I r.EHf~S.' • , '-1 ::HILI r:::::ANS .• 7'1 NUCOA MHRG .83 ;w; nur . oo TOTAL 18.32 ---·-- ... r ==···r:'''FD---·\. 'Bu JtJt 21 . Mill a9 July 16, 1980 ....~·:..:- ,·.n; =·;trfT OF ~9.!'~·~'f!~t:i! t.FfAIRS Mr. Patrick co 1"1'l~s ~- P~~q{M~t Ralph's Grocery Company 1100 W. Artesia Blvd. Compton, California 90220 Dear Mr. Collins: An association of 34 years, when ended, deserves some explanation--even when not requested. -----1. I have shopped Ralph's for 34 years because: a. Ralph's stores and people were always very pleasant and friendly. b. I always felt that Ralph's could be believed and trusted. No one thought of being cheated by Ralph's. Ralph's was honest. What has happened to Ralph's? I have quit Ralph's because: 1. The computer-scanner can be the biggest rip-off foisted on the buying public in this century. 2. Ralph's employees have become as cold, automated and unfriendly as their computers. Background. The last time I went into your (Gould St.) La Canada store to shop on my way home from \'JOrk (as I have done since that store opened), this was the scenario: 1. I got vegetables/fruit and started looking for other items I needed and found that none of them was price-ticketed. I did find a package bacon with a 79¢ price sticker. 2. While waiting in the checkout line, I approached a young woman who is • apparently the manager/assist~nt m~nager and said I would like to regi5ter a mild complaint. She: "Oh, yeah?" Me: "There are a number of items l need that are not price-ticketed, and I will not buy things that do not show a price." She: "Yeah. Well, that's how it is." U1y, my! how gracious can you people get?) 3. At the check stand the bacon was run over the scanner, which registe "Bacon. 89c." I called it to the checker's attention and she credi me with 10¢. Dissatisfaction has been growing for a long time. Your highly touted co~putc - scanner is a great management tool, I agree. But it has the potential for abuse, to the cost of the customer. A large weekly grocery purchase for, SJY a family of four contains far too many items for a person to remember what t bin tickets said. If you don't price the items, who is going to know (after I Mr. Patrick Collins -2- July 16, 1980 getting home) whether the computer made a mistake? And, if the purchaser believes jt did, how can he/she prove it? I'm sure somebody thought of that. Why do you persist in these silly 11 give-away 11 games? Everyone knows that you .. give-away" nothing, we are paying for it. Why don't you take that money (the "give-away .. plus the attendant advertising} and hire part-time young people (high school/college) to keep your merchandise price-ticketed? Many young people really need a part-time job to supplement whatever income they may have while in school. Your advertising department seems to assume that people will believe anything if it is shouted at them loudly and frequently and if it is posted in big letters where they caR look at it: 1. "Ralph's introduces the end of the long checkout line. If there are more than one or two persons in line we will open another checkout stand." FALSE. I have stood 4-5 deep in a checkout line, staring at that particular poster, while there were 2-3 closed stands. 2. "If our computer makes a mistake, you get the item free." FALSE. I have caught your computer in errors 3 times, and all that was o was the difference of the overcharge. That is all I wanted and all VJOuld accept. Bul I resent the lie. So, goodby Ralph's. In discussing this with numerous friends, I am surprised to learn ma have quit Ralph's for these and related reasons. After 34 years, I feel you have a right to know these things. Respectfully yours. I cc: l. A. County Dept. of Consumer Affairs July 29, 1980 Dear Sir: The Ralph's Grocer,y Store at Pacific Coast Highway and Anza Avenue in Torrance, as you are aware, uses a price scanner and prints out a. tape of each itef!'l purchased and its cost. At t~is store, most ite:1s in stock are not m~rked as to price; instead the prices are on the shelf under the stocked items. I appreciate the accuracy and speed of ttese machines. However I do not like the fact that items do not have individual price :narkings as this can lead to ccn- -==--,.- :-:-,,. __ :fusion. For exa.;nple: in front of two types of Swanson 1 s TV Chicken Din.'1ers, there were five price card ~rkings-- two at 93¢, $1.03, 86¢, and another one for over $1.60. In very s~all print, almost hidden in the metal edces holding the tags, the 93¢ and $1.03 tags said Swa~son 1 s Chicken Dinners. H wever, at the check stand, I was ·.cr.arged $1.09 for t~'9 dinner. Five dc..ys la~cr when I was again at the store, I noticed that the type of dinner I had bought had bt:cn since ticketed at the store. Haybe so;neone else had complained. As prices are not ;narked on the packages, I have two options; either I ncrk the price on each item that I buy or I write e:~ch price on r:ry g::-ocery list. Elthcr way is ti ;e C' nsurning and !nEkes :::~e less li;cely to shop at your store which is near my ho:ne. T.,.._is month {July) I spent ne:.rly $500 on food al ne, a'1d I \..'o.nt these packages murked. I understa:1d that the consurner is protected in regard;, to indiv~dual price :7!E Sincerely yours, ~JTL;.___u ./. ( FOR OFFICE USE ONLY ' COUNTY OF LOS ANGELES DEPARTMENT OF CONSUMER AFFAIRS 500 WEST TEMPLE STREET, B·96 CATEGO LOS ANGELES, CALIFORNIA 90012 (213) 974 1452 ASSIGNED TO ___ ·--- COMPLAINT FORM INSTRUCTIONS: FILL OUT BOTH SIDES OF THIS FORM. PLEASE PRINT OR TYPE. ATTACH COPIES OF ALL OOCU\', ICONTRACTS, RECEIPTS, CANCELED CHECKS, CORRESPONDENCE, ETC.l. DO NOT SEND ORIGINALS. SID-- COf>',PLAINT AGAINST /;{A/5 &;foe 6--R':J' 1\:At.lE OF BUSII\:ESS OR C01\~PANY - SALESPERSON OR REPR.E~ENTATIVE ~-; .c c u hv e_ c.-:? ·c <..:'$ __ __:. ___ _,.,._ ------; _j{J_l;i_O_j~~ /f.?:u~.~-- ·DDRESS: NUMBER STREET ADDRESS: ~ITY STATE ZIP CODE CITY STATE , If' ------4 ELEPHONE: HOME TELEPHONE ------~ HEPHONE: WORK liD YOU SIGN A CONTRACT OR ANY OTHE~ ~~~E_RSJ ' SO, GIVE THE CONTRACT, INVOIC .-:~:1 CJPY OF THE DOCUMENT. CONTRACT I '- - . ..-~.' CAS[ NO. 011_1(~--- ., - - . ..., ... - ~ ' ~ "'2 cor:.ru,I:,ANT .• 0 "'Z 511-.:HT ADDR(S5 rlt.ED CO~.:PLAINT ·." ------"i------~---~~- ~--~--~--- -----~------ ----~------~--~------ ~----~~------ - -~-~--~-----~------~----~------~----~~~--~ ------~------~------~~ -- --~ ~------ :;H.\ T DO YOU CONSIDER A FAIR AND REASONABLE SETTLE~IENT OF YOUR COMPLAINT? ~- ~~~------~------ R£AD THE FOLLO\'IING REFORE SIG~JING P.ELOW: I CC:RTJFY THAT THE INFOR~.\ATION CO~HAINED IN THIS COMPLAINT A:"JO All OF THE I~JFOH.'.1ATIO~J I HAVE Gl\'l'• IS TRUE, CORRECT A;JQ COMPLETE TO THE BEST OF ~.1Y K~ t:: O;"OO;:R TO RESOLVE ~IY COMPLAINT, I UNDERSTAND A COPY OF THIS FOR.'.I \lAY BE SENT TO THE BUSINESS OH rL!I;;(~'; I H:W FlltD THIS CC~.IPLAINT AGAINST. ------~---~------~----- SIG'I.\TUAE DATE SIGNED )0 •.JT FORGET TO INCLL10E COPIES (NOT ORIGI:\IALSI OF ANY OOCU~.IENTS. '- ~ .,. <. - ...... -. • • .. • • • • 4 .... -"_,., .... ,. .:. ') - April 24, 1980 • . '-. ·• ''•t Prc~ident -· . r ·t- Vans Grocery Co~pany 10150 Lo~er Azusa Road El Monte, California Dear Sir or Nada.m, This letter concerqs electronic pricing. Last night, the computer read the cost of some sponges as $.75, "·hen were r..arked $. 45. The checker did not not ice tl1e discrepancy, I did. Tha alr:1ost a 100 percent r.1arkup on the price of this one item. I am sending the s:.lescheck to you, and \.Jriting this letter, because this is the first time I have understood ,,,hy there are consumer protection groups fighting this seemingly efficient pricing system. I wonder how many people paid seventy-five cents for these forty-five c sponr,es in this one branch of your 1.1:1rkets. Is there .:my specific action that can be t~kcn to eliminate such errors from your system? Si t\;erely yours, cc: Los /,n);cles County DepnrtJ;Jent of Consumer Affairs I.:nclosut·e .. '. ~ .... ·:: : . . ~ .. . •·.· . ·.: . . ..: .··. . ·. :.·.'. l.JuNS llfiLUES U . ~ .: :· :.· ...... ~365 ~tENCOE flUE Fri M\iF.'GflF:H~E l . 01 F ...... ·: ... : OhiNGE E:fl(i .79 F ·,. ·.· CLUE: SOliP. • '-!" [: .... ~ ... ::: -~ ··::>: .... ".·~·.··-..-,~.:?~~:~··?~~::\.} . .. ' ...·. -~ ..... ··: OF· OEPUSll 20 F . . - 6 • • • • • ' • • .. : ~.. :. :-·. ~; ~ -~- :; ._ • : .'· ~ ...... ,, CLUE: SOuR • lf~ E: ;.r.ur ~:a·os I 1 .20 F ··. .37 F .2DLE: "' • Pi F h.it riTO t.!HI TE .23 F GG loll, CDU~ . 2t· F .15/LE: • Ot· F . . .. ~ . . . ·' . ., ...... ··:. ' .. :.·.::_·~·~·;· :~ -- '- ...... : ' .. - ·: ... ,j;..: ... •...... ·.· . :..· .. ~ l:Cflf~ o·~ F HOST !.)J~-: 1 l Q 1 • 3 ·~ F 1m: .u·J r:11L CSii 1fl. 00 LHG 3 .. 33 :~u:'10 Lf1NE ·~ FOR OFFICE USE ONLY .. • • I '80 M tO PH\2 07 go .. 1 7.7J CASE NUMBER COUNTY OF LOS ANGELES · ;iEii ~~til ~~EN i 0 : DEPARTMENT OF CONSUMER AFFAIRS CATEGORY______CONSut~ER AFF AI. S 500WEST TEMPLE STREET, 8·96 tOUMit or lCS .\SCEt ~ LOS ANGELES, CALIFORNIA 90012 DATE OPENED------ (213) 974-1452 ASSIGNED TO------ COMPLAINT FORM OFFICE) ------ll INSTRUCTIONS: FILL OUT BOTH SIDES OF THIS FORM. PLEASE PRINT OR TYPE. ATTACH COPIES OF ALL DOCUMENTS (CONTRACTS, RECEIPTS, CANCELED CHECKS, CORRESPONDENCE. ETC.). DO NOT SEND ORIGINALS. :::ONSUMER SID-- COMPLAINT AGAINST SID _j Ralph's Grocery Co. i \ ·.' 1 i · -. ! ~ . · • NAME OF BUSINESS OR COMPANY 8704 Sepulveda Blvd. :AME SALESPERSON OR REPRESENTATIVE 4 1 .. •, ·DDRESS: NUMBER STREET ADDRESS: NUMBER STREET . Los Angeles. CA 90045, ·, ' .ITY STATE ZIP CODE CITY STATE ZIP CODE .670-2522 •J . • ! . ELEPHON"''.: TELEPHONE ~; /.1/80 ELEPHONE: WORK DATE OF TRANSACTION )ID YOU SIGN A CONTRACT OR ANY OTHER PAPERS? YES 0 NO Q F SO, GIVE THE CONTRACT, INVOICE OR CHARGE ACCOUNT NUMBER AND ATTACH A :oPY OF THE DOCUMENT. CONTRACT/ACCOUNT NO.. ·AVE YOU CONTACTED THE BUSINESS REGARDING THIS COMPLAINT? YES 0 NO 0 AlESPERSON OR REPRESENTATIVE CONTACTED: ___.,...;....;.._....______DATES· ) ------ 'AVE YOU FILED THIS COMPLAINT WITH ANOTHER CONSUMER PROTECTION AGENCY? YES NO ::: YES, WHICH AGENCY? 0 0 0 YOU MAKE PAYMENTS TO A PARTY DIFFERENT FROM. THE COMPANY OR BUSINESS NO OU HAVE FILED THIS COMPLAINT AGAINST? IF YES. TO WHOM?· YES 0 D 'AVE YOU RETAINED AN ATTORNEY TO ASSIST YOU IN RESOLVING THIS MATTER? YES 0 NO 0 •:..VE YOU FILED THIS COMPLAINT IN SMALL CLAIMS COURT? YES 0 NO 0 OES THIS COMPLAINT INVOLVE AN ACTIVE LAWSUIT OR OTHER LEGAL ACTION? YES 0 NO 0 ·---- AS B;HEFLY AS POSSIBLE, PLEASE DESCRIBE THE DETAILS OF YOUR COMPLAINT. INCLUDE NAMES OF INQIVIDUALS AND DATES EVENTS. BE FACTUAL. USE ADDITIONAL PAGES, IF NECESSARY. I 1,; I !....._' ; I ' :,.." 1 f ,-.' l.' 1 \' ~ \ \ I . ' ·t I .. c I I , \ • ( ....l.... \. \ : ', ( I ;.._ .. \. ::•! I . ' I '.: .: { , I . ) -I,,, ·-. I • ! - \. J This complaint is filed because of my concern about computerized check out used in markets and the possibility that stores will cease ". was J/. marking prices on merchandies. (In this instance _the price was- marke~-2 parge '..lf'for Knott's Apricot/Pineapple jam marked $1 .19 and $0.88 for Knott's Marmadade marked $0.69. Apparently the computer was improperly programed for these items. I returned to the market to complain to the manager. He refunded the difference which is all I _expected - but the transaction cost me time 1 gasoime I and postage and demonstrates how easily the computerized check out can "rip off" the consnmer. WHAT DO YOU CONSIDER A FAIR AND REASONABLE SETTLEMENT OF YOUR COMPLAINT? READ THE FOLLOWING BEFORE SIGNING BELOW: I CERTIFY THAT THE INFORMATION CONTAINED IN THIS COMPLAINT AND ALL OF THE INFORMATION I HAVE GIVEN CORRECT AND COMPLETE TO THE BEST OF MY KNOWLEDGE. IN ORDER TO RESOLVE MY COMPLAINT, I UNDERSTAND A COPY OF THIS FORM MAY BE SENT TO THE BUSINESS OR PERSON FILED THIS COMPLAINT AGAINST. SIGNATURE DATE SIGNED DO NOT FORGET TO INCLUDE COPIES (NOT ORIGINALS! Of ANY DOCUMENTS. July 29' 1930 Dear Sir: The Ralph 1 s Grocery Store at Pacific Coast 1E(3b:ay and Anza Avenue in Torrance, as you are aware, uses a price scanner and prints out a tape of each ite!:' purchased and its cost. At tr5 s store, most i te:1s in stock are not Rarked as to price; instead the p::-iccs ars on the shelf under the stccked iteRs. I appreciate the accuracy and speed of t~:8se Rachines. However I do not like the fact that itens O.o not have individual price :narki:1gs as this can lead to ccn fusion. For exa:'lple: in front of two types of Swanson 1 s TV Chicken Jin.'1ers, there were five price card ~rklnes-- two at 93¢, $1.03, 86¢, and another one for over $1.60. In very s!"",all print, almost hidden in tlte ::1e:al ed~es holdine the tags, the 93¢ and $f .03 tags said Swa ;son 1 s Chicken Dinners. H wever, at the check stand, I \·Te.s c:rargnd $1.09 for t}'v; din:·,er. Five d. ys la ~er \.fhcn I was at;ain at the store, I noticed that the type of dinner I had bought had \xc·n since ticketed at the store. :la.ybe so,neo!1e else had CO::l.!Jls.ined. As prices are not ;rt I understa:1d that the C0?1SU."Tter is protected in reg~:.rd:~ to indiv'dual price ::J.'~rldng in Los Angeles City and Los A c;eJ es County. \.1e 1-1ho Lve in '.:'orrance are not protected. : :ust \.Je get the C~t~r Council to protect us, toe, or \iilJ the super ~{rkets do t:,eir sha~·e to help the con::m .e:c- s·. op w::.sel~.-? '_ ) (I , , .{J L 1 . I t I c ... j .j ~_/ t j '- J.._ l ,I c I'- t- '-• /- {' . t' L· ,). l I / 1..,' I I • ) <. 1 -. /