HARVEY'S AIMS TO CUT LABOR COSTS WITH ESL TESTING

NASHVILLE, Ga. -- With the goal of providing greater pricing accuracy while saving on labor costs, Harvey's Supermarkets here is preparing for a pilot test of electronic shelf labels in one store next month."We are planning a very comprehensive installation," said Benny Ensley, director of accounting and data operations at Harvey's. "I estimate that we will outfit approximately 90% of the store with

NASHVILLE, Ga. -- With the goal of providing greater pricing accuracy while saving on labor costs, Harvey's Supermarkets here is preparing for a pilot test of electronic shelf labels in one store next month.

"We are planning a very comprehensive installation," said Benny Ensley, director of accounting and data operations at Harvey's. "I estimate that we will outfit approximately 90% of the store with the ESLs."

According to Ensley, Harvey's store here will launch the use of electronic shelf tags, in place of traditional paper shelf labels, in January. The tags will be placed on shelves in most store departments, including perishables.

"Most retailers don't use the units in the [perishables] area, but we feel that if we can utilize them in this environment then it may be possible to roll the units out to all areas in our stores," he explained.

The ESL test coincides with the retailer's ongoing chainwide installation of a new point-of-sale system in its 44 stores. The POS rollout is expected to be complete by the first quarter of 1999.

The electronic tags will enable Harvey's to gain price integrity and accuracy, because shelf pricing will be implemented simultaneously with weekly pricing updates made to the retailer's POS units, said Ensley.

"We expect to reach between 90% and 100% pricing accuracy, because the price file that is transmitted to the shelf label will be the same file that is transferred to our POS," he said.

A computer at the retailer's headquarters, which stores all price data, transmits the data electronically to the store's database.

The plastic tags house a radio chip, which enables the retailer to transmit price changes to the electronic labels via radio frequency technology. Within 30 seconds the new prices are electronically transferred from the database to both the POS system and the ESLs.

Though he would not provide specific numbers, Ensley does expect to see labor savings once the ESLs are installed.

"Over a period of time our increased productivity should offset the cost of the units, as we will no longer need to send associates out to the shelves to manually change individual tags."

Ensley would not comment on when the chain would expand ESL usage to additional stores.

Electronic Retailing Systems International, Wilton, Conn., the company supplying the ESLs, offers retailers the option to buy the electronic tags or to lease the system on a monthly basis, with payment based on the number of price changes the chain executes. Harvey's will lease the system when rolling it out to additional stores, according to a source familiar with the situation.