Loblaw Paving Way for Adoption of Produce Scanning

Loblaw Cos. plans to accelerate the implementation of POS scanning of small bar codes on loose produce items this fall and early next year at its more than 1,000 corporate and franchised stores, as more produce suppliers begin using stickers that include both the bar codes and traditional price look-up (PLU) codes. Loblaw, which began scanning the 14-digit DataBar bar codes

BRAMPTON, Ontario — Loblaw Cos. here plans to accelerate the implementation of POS scanning of small “DataBar” bar codes on loose produce items this fall and early next year at its more than 1,000 corporate and franchised stores, as more produce suppliers begin using stickers that include both the bar codes and traditional price look-up (PLU) codes.

Loblaw, which began scanning the 14-digit DataBar bar codes on apples, bananas and avocados a year ago, currently does so in 15 stores “in one area of Ontario,” said Larry Kieswetter, senior director of produce procurement for Loblaw. The company would like to have all of the stores operated by Loblaw scanning loose produce, but “when we will get there is hard to say.”

The chief advantage of scanning loose produce rather than identifying them via PLU numbers is that bar-code scanning is a vastly more accurate process that will ensure that produce is being correctly identified at the POS. And instead of produce being identified just by type — Red Delicious apple, for example — it will be identified by type and supplier — Ranier Red Delicious apple — like any Center Store product.

Produce scanning is expected to prevent the loss of revenue that occurs when product like organic produce is misidentified, and to give produce merchandisers more accurate sales and inventory data with which to manage the department. In these areas, “produce has been behind the rest of the departments in the store” that have used bar codes for more than 30 years, Kieswetter noted.

The vast majority of Loblaw stores are equipped with POS scanners capable of scanning the DataBar (formerly called the Reduced Space Symbology code), said Kieswetter. While capable of scanning the DataBar, the scanners still need to have this capability activated. “Come the fall, we'll turn on a lot more scanners and have training sessions for front-end staff to get them to use scanning on these items,” he said. Some smaller independent units served by Loblaw still use scanners unable to scan the DataBar, he added. Scanners made after 2002 are typically able to scan the DataBar.

A 40-year produce veteran who acknowledged not being especially fond of technology, Kieswetter outlined Loblaw's produce scanning activities last month at the U Connect conference, sponsored by GS1 US, Lawrence-ville, N.J.

Wal-Mart Stores, Bentonville, Ark., which also began scanning the DataBar on produce a year ago in some stores, is also planning on a national rollout of produce scanning, according to Greg Rowe, director of business development, GS1 US, which manages bar-code standards in this country. Wal-Mart declined to respond to a request for comment on its plans.

In addition, according to Rowe, Kroger Co., Cincinnati, is “in the process of rolling out” produce bar-code scanning, and another six retailers are talking about the process with produce suppliers and PLU sticker companies. (Kroger did not respond to a call for comment.) “In the next six to nine months, a lot more retailers will be scanning the DataBar,” Rowe said.

Loblaw's first experience testing produce bar codes took place six or seven years ago, but the project was soon shelved due to a lack of cooperation from produce suppliers and other retailers, Kieswetter said. However, over the past six months to a year, he has observed “10 times as much movement as in the previous two to three years.” He also predicted that over the next six months to a year, industry activity around produce bar codes “will be much further advanced than any of us could have envisioned six months ago.”

Loblaw has been receiving bar-coded produce from banana suppliers Dole and Banacol; apple suppliers Ranier and Stemilt, among others; and avocado supplier Mission. Future produce categories that will use the DataBar include tomatoes, peppers and stone fruit. “We feel it's a matter of time before this is global,” Kieswetter said.


LARGER STICKER

The DataBar comes in several versions. The version being used on produce stickers is called the DataBar stacked omnidirectional, which can be scanned through a plastic produce bag. Other versions of the DataBar are slated to be used on meat packaging and coupons, among other applications.

The produce sticker with a DataBar also contains a PLU code so that stores unable to scan the bar code can still process the product at the checkout; the larger sticker costs about 30% more than a PLU-only sticker. Suppliers absorb that cost, though it should be recouped through the additional revenue resulting from more accurate scans, Kieswetter said.

The greater scanning accuracy afforded by the DataBar on produce will lead to a number of benefits, said Kieswetter. These include easier differentiation among produce commodities; faster throughput at the checkout, both cashier-managed and self-scan checkouts; greater use of self-checkout; and better inventory records for government agencies responsible for food safety.

Organic produce sup- pliers and retailers should especially benefit from the adoption of the DataBar, which will prevent cashiers from confusing organic produce for conventional items. Kieswetter estimated that between 30% and 50% of the POS rings for organic produce are incorrect. “Cashiers get to know that the PLU for bananas is 4011 and don't bother looking at whether the banana is organic or conventional,” he said. “There could be a 20-cents-per-pound difference in price.”

Kieswetter also pointed out that the DataBar will help retailers trace the origin of products — an important responsibility in the wake of product recalls for such produce as spinach and lettuce. “The consumer expects us to do our due diligence and see that food is safe,” Kieswetter said.

Kieswetter expects other applications of the DataBar in produce — such as product replenishment and category management — to take place a few years from now. “There are so many things the produce department is trying to catch up with to become more efficient like the other departments in the store,” he said.