Friday, July 22, 2011

On having to ring up your own groceries but pay "full price"

I saw the following quote on Instapundit:

SEEN ON FACEBOOK: “I work all day, go to Kroger late night, stock up on groceries and then get to the checkout and have to scan and bag everything by myself and still pay full price while Kroger can eliminate a job. Hmmmmm. That’s the equivalent to you coming into my restaurant, cooking your own food and I still get to charge full price. Am I being unreasonable???”

I honestly don't know where to begin.  For lack of a better place, let's start with the history of grocery stores. 
If you ever find yourself in Memphis Tennessee with a couple of hours to kill, check out The Pink Palace museum.  They've got a beautifully reconstructed model of a Piggly Wiggly grocery store inside. 
Why? 
Piggly Wiggly (founded in Memphis) was the first self-serve grocery store in the U.S.  Instead of handing the clerk behind the counter your list of groceries, if you were a Piggly Wiggly shopper, you took a cart or a basket and got your groceries all by yourself. 


This move didn't save or create any jobs in the grocery industry.  In fact, it eliminated them.  But it saved a lot of money for consumers.  This allowed them to eventually purchase more of other things instead of food: iPods, flatscreen TV's, or laptop computers, creating jobs in the iPod, TV and laptop industries. 

Skip forward about a half century.  Someone came up with a pattern of lines called a "barcode" that could be read by another device called a "scanner". 


This move didn't create any jobs in the grocery industry.  It made checking out much, much faster, and eliminated a lot of inventory and supply chain jobs in the grocery distribution system.  But it saved a lot of money for consumers. This allowed them to eventually purchase more of other things instead of food: iPods, flatscreen TV's, or laptop computers, creating jobs in the iPod, TV and laptop industries.

By the time the scanners came along, the U.S. military had already been using a warehouse concept called "cross-docking" for quite some time.  This is a warehouse design where incoming shipments are received on one side, outgoing shipments are shipped on the other, with minimal storage space in between.  Minimal inventory is kept on hand in the warehouse at any given time. 
Sam Walton, of Wal-Mart fame, was the first to apply this concept to the grocery and retail industry. 


This move didn't create any jobs in the grocery industry. It made distribution much, much faster, and eliminated a lot of inventory and supply chain jobs in the grocery distribution system. But it saved a lot of money for consumers. This allowed them to eventually purchase more of other things instead of food: iPods, flatscreen TV's, or laptop computers, creating jobs in the iPod, TV and laptop industries.

Finally, someone invented the self-serve grocery checkout stand.  If you have a minimal amount of stuff to ring up, you can choose to do it yourself. 


As the Facebook commenter wrote, the customer is doing some of the work himself.  Kind of like the Piggly Wiggly customer started doing in the 1920's. 

This move toward self-checkout doesn't create any jobs in the grocery industry. It makes getting out of the store much, much faster, and it saves a lot of money for consumers. This allows them to eventually purchase more of other things instead of food: iPods, flatscreen TV's, or laptop computers, creating jobs in the iPod, TV and laptop industries.

I hope this has helped. 

We have not become a prosperous nation by "saving or creating jobs".  We have become a prosperous nation by constantly churning the process, always trying to come up with a better way to get things done. 
No one can predict what the next way will be.  No one knows which kid is working in the Produce Department of an Albertson's Grocery Store who has already come up with a better way to distribute and merchandise fruit and vegetables, and who just can't wait to open his own store and try out his idea.  No one knows which computer geek in his Mom's basement has already come up with a system to make distribution and logistics more efficient. 

These people are going to bring us improvements and levels of progress that we can't even imagine, here in the primitive year 2011. 

The only thing we do know is that there will always be someone complaining about the cost of progress and doing everything in his power to keep it from happening. 

7 comments:

Harper said...

Does anyone else remember the stores that eliminated the price stickers (before bar codes) requiring the customer to write the price on the item with a grease pencil as they put it in the cart? They were also among the first bag your own stores when I was growing up in Kansas. I think they were called Food 4 Less.

I must disagree with the notion that self checkouts allow the purchaser to get out of the store 'much, much faster'. I have never used one that didn't require the cashier/attendant to intervene either at their master control register or by coming over and typing in some magic code or turning a key. I like to think that self checkouts are only beneficial for anti-social people or those with aspirations of being a cashier one day.

Didn't I just read that Albertson's is removing all self checkouts to improve customer interaction? Will that save or create jobs? Only if they improve their customer service skills, I suppose.

CenTexTim said...

"It makes getting out of the store much, much faster..."

Ditto what Harper said. In my experience, it takes longer to navigate a self-service lane, especially when I buy beer or wine (which is often) because a manager has to come over and verify that I am indeed over 21, even though I'm plainly on the downhill side of 50.

"...and it saves a lot of money for consumers."

I'm not convinced that eliminating a few minimum wage checker jobs results in large savings - maybe a few pennies per cartload. And it eliminates any cross-selling opportunities. The local HEB checkers are always pushing stamps, ice, and at-the-register specials. Plus they usually ask if I found everything okay, which gives me the chance to inform them about items I would like to purchase but weren't in stock. Presumably this input is used to improve the store offerings.

Tim Lebsack said...

Perhaps this process falls under Joseph Schumpeter's term 'creative destruction'.

My father's latest vehicle has OnStar. The daily trip still takes as much time,because he doesn't drive faster than he did (with the previous limo), but the inconveniences of a broken fan belt or being a stranger in a strange land are much lessened.

Grocery store joke - Aldi has gone one better than Piggly Wiggly or even Walmart.
Aldi has been able to remove almost all food from their stores.

The Whited Sepulchre said...

Haper, CenTex,

It could be that you've mentioned the exception which (almost) proves my point:

I'm a cashiering/scanning Jedi. I can ring up my stuff in record time. Others cannot.

If the general public starts voting with their feet, and prefers the cashiered checkout line, they'll be eliminated. Quickly.

Too bad the same standard can't be applied to Amtrak, the Post Office, etc etc etc.

Grocery joke, to follow up Tim Lebsack's offering.....

Dolly Parton is purchasing the Piggly Wiggly chain and all of the Harris-Teeter grocery stores. The new company will be called "Wiggly Teeters".

May God forgive me for posting that.

Fester said...

I am with TWS here, I am good with the self checkouts and since they tend to have 2 or 3 self checkout machines in a row versus one traditional checkout, I find them to be much faster, especially when I tend to buy only a few items for dinner at any given time.

Nick said...

I agree with Harper. Self checkout is more proof that no human should be allowed to use any machine that is smarter than they are.

I will stand in a line with 10 people before I go to a self-checkout lane with 2 people. The stupidest person on the planet is always in front of me.

Whether I'm in line at a store or at airport security, if I see an old woman in front of me, I switch lanes.

If the self-checkout is empty, I'll use it, but half the time the machines don't work. I'm tired of having it tell me to put the item in the bag when I already put it in the bag.

Having the option of self-service is fine, but I want the choice of a human servant. I'll pay a little more for it.

Anonymous said...

wow. Good Call Nick!
I totally agree.
If they would make the registers less smart it might help. Stop trying to weigh and verify that I placed the item in the bag. Just beep to tell me it registered and show me how much you charged me for it.