LOFINO'S CONTINUES INSTALLING INSPECTION SYSTEM

BEAVERCREEK, Ohio -- Lofino's Food Stores here is continuing a rollout of a store system that electronically documents inspections of sales floor conditions in order to prevent slip-and-fall accidents and provide a legal defense when accidents occur.The patented system, called GleasonESP, from Gleason Technology, Malvern, Pa., has been installed in over 200 stores at several retailers since its introduction

BEAVERCREEK, Ohio -- Lofino's Food Stores here is continuing a rollout of a store system that electronically documents inspections of sales floor conditions in order to prevent slip-and-fall accidents and provide a legal defense when accidents occur.

The patented system, called GleasonESP, from Gleason Technology, Malvern, Pa., has been installed in over 200 stores at several retailers since its introduction in 1999, including Harvey's, Norkus Enterprises, Foodmaster, Giant Eagle, Whole Foods and Lofino's. Whole Foods, Austin, Texas, installed the system in three additional stores last month for a total of about 23 store installations throughout the U.S., according to Gleason Technology.

Lofino's, which runs 15 stores (14 in Ohio) under three banners of varying dimensions, began testing the system at one of its four Cub outlets in March 2001, according to Joe Miller, Lofino's loss prevention manager. After a year-long test, the other three Cub stores began using the system, followed by the flagship Lofino's store here and nine Ohio Save-A-Lot stores.

Two months ago, the system was installed in Lofino's first Save-A-Lot store in Colorado, where a second Save-A-Lot will open this month, followed by a third in April. Miller said he expects to install the system in these two new stores as well.

Like other users of the GleasonESP system, Miller sees it as a way of documenting and enforcing floor inspections, or walk-arounds. Instead of relying on written records of inspections, stores install electronic identification markers at key points around the store, and employees walking the store tap those markers with an electronic "wand," or data retriever, which registers the time and location of the tap. Employee IDs are also recorded. A separate marker is tapped if a hazard or spill is spotted and when it is removed.

The information stored in the wand is downloaded to a docking station and then transmitted to Gleason's online database where it is processed to provide management reports. The reports can be used to improve store conditions or as a defense against legal claims in the event of an accident.

According to Miller, the system has reduced the number of slip-and-fall accidents that occur in Lofino's stores. One Cub store used to report 40 incidents per year, and now "the total companywide is not that much," he said. In the first Cub test store, the number of accident claims dropped 25% and related expenses fell by 67%. Three Save-A-Lot stores, which average about 15,000 square feet, have reported zero incidents over the past year, he noted.

An independent study conducted in 2002 by Shelter Island Risk Services, Shelter Island, N.Y., concluded that the GleasonESP system reduced the expected probability of incurring a slip-and-fall claim by 30.5%, regardless of geographic location or size of store.

In addition to preventing accidents, the "sweep logs" that validate employee inspections can be used as a defense against negligence in a legal claim, said Miller. "When we bring sweep logs to court, there's no way they can say we were negligent," he said. "We show that we have a process and a third party recording the data." Thus far, there have been no payouts in cases defended with the system, he said, adding that some attorneys have dropped cases after discovering Lofino's use of the system.

From a return-on-investment perspective, the legal savings are compelling, said Miller. "It cost us less than $3,000 per store to install the system, and the minimum payout on a claim is $5,000." In addition, Miller expects the company's insurance rates to be less when they are renewed. According to Gleason, retailers are charged an annual license and subscription fee of $1,867 per store in years one through three, and $1,400 thereafter; initial hardware, installation and training cost per store is $2,100.

Miller said that store inspections, conducted by store management staff, department heads or maintenance staff, take place hourly during store hours at most Lofino's stores. Save-A-Lot stores use between 12 and 15 ID markers; Cubs (about 65,000 square feet) use between 25 and 30. Stores are required to conduct 85% to 90% of planned inspections daily. Data is downloaded to Gleason weekly.

An additional benefit from the system is positive public relations as customers see greater attention to store cleanliness and comment on cleaner stores, Miller said. During inspections, employees can assist customers or address inventory issues.

Miller said the biggest implementation challenge is getting store staff to be diligent about inspections, especially at the outset. "After a couple of weeks they usually get the hang of it," he said. Some stores use timers at the registers to remind them to do the inspections. Some stores are concerned about the time it takes to do inspections, but even at Cub stores walk-arounds can be accomplished in 12 to 15 minutes, he said.