Long Wait

The UPC's slow start

The computer revolution began coming to supermarkets in the early '70s in the form of the UPC (Universal Product Code), the odd, stamp-size box of black bars and numbers printed on just about everything from soup cans to the covers of TIME magazines sold in the U.S. The UPC was to be the core of a system that would not only keep up-to-date records on inventories and prices, but also eliminate cash register errors, since check-out clerks would tot up a shopper's bill by merely passing the purchases over an optical scanner capable of "reading" the code. By now, fully 85% of all the merchandise bears the UPC.

Trouble is, the scanners and computers needed to reckon the sales are missing. Of the nation's 33,000 supermarkets, only 373 have the new equipment. Meanwhile, the slow pace of the UPC revolution has led to quick check-outs by several firms that had hoped to capture a share of the supermarket automation field. After investing heavily in research and marketing studies, General Electric, RCA, Singer, Bunker Ramo and Pitney-Bowes all chose to cut their losses and quit. Now even Sperry Rand, which had bought out RCA's licenses, has withdrawn.

That leaves only four competitors. In the lead is IBM, which has installed more than half of the existing systems. It has also developed a programming system that will enable a store manager to fine-tune his computer to print out exactly the data he needs most, such as which items are selling fastest and whether his customers are responding to sale prices on certain merchandise. National Semiconductor also is turning out a completely computerized system, and so far has sold 45. The other two rivals are Sweda and NCR, which enjoy the advantage of having made cash registers for years. Both companies are concentrating on automated check-out equipment that can be bought on a step-by-step basis: first the cash register and later the electronic scanner and minicomputer. Sweda has installed only 32 fully automated systems so far, but it has electronic registers in 400 stores that it considers prime customers for add-on equipment.

Price has been the major deterrent. A computer system costs about $20,000 per check-out lane, or $150,000 for the average supermarket--a stiff investment for a chain commonly operating on profit margins of 2% or less. Still, most chains are now testing the systems and are pleased with their performance. The number of installations is slowly growing, with 500 units expected to be in place by year's end and 1,000 by 1980. The surviving equipment-makers are still counting on huge sales eventually, but the wait in line is going to be long.

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