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Supermarkets to Test Automated Checkout Lines : Self-service: Studies indicate 40% of shoppers are willing to ring up and bag their own groceries at unmanned counters.

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From Reuters

First it was self-service gasoline. Then came bank teller machines. And in the not-too-distant future, American shoppers will probably be ringing up their own groceries at automated checkout counters.

Uniquest Inc., a small Florida company headed by a former senior IBM executive, has patented an automated checkout machine that it believes will change the way consumers buy groceries.

The unmanned counters consist of a price scanner, a computer screen that displays each item’s price in large letters and a computer-generated voice that confirms the price.

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It’s the shopper’s responsibility to place items on a conveyor belt that allows the scanner to read each universal product code, then bag the groceries and pay a clerk elsewhere in the store. If there’s a problem, a buzzer or light will summon a clerk to help.

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For loose produce, such as apples and onions, the customer may need to use a touch-pad to tell the computer what is being rung up.

The technology has gotten rave reviews from some of the more than 1 million shoppers who have used it at test sites in supermarkets in Florida, New Jersey and Michigan. An estimated 40% of shoppers at the test stores elected to use the automated stands rather than checkout stands with clerks.

A&P;, which owns about 1,300 supermarkets, plans to install some of the automated checkout stands at a dozen of its stores in Toronto beginning in February.

The chief goal of the new technology is to cut the time grocery shoppers spend waiting in line, according to Uniquest CEO Gus Klein.

“The No. 1 complaint at grocery stores is long checkout lines and some lanes not being open,” he said. “Automated checkout provides a more even and smooth flow of customers through the lanes.”

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It also means shoppers can be sure they are charged the correct amount for groceries and can stop the machine at any point to get a quick reading of how much they’ve spent so far.

The technology also reduces “shrinkage,” or disappearance of steaks and other expensive foods because of employee theft or clerical errors.

Some of the most enthusiastic users are harried mothers who see the technology as a welcome way to keep fidgety youngsters occupied at the checkout counter.

“From a consumer’s point of view, this is a piece of equipment whose time has come,” said Stephanie Haggerty, an analyst with First Southeastern Securities. “This is going to eventually be as common as automated teller machines at banks.”

Haggerty estimates a U.S. market of at least $3 billion for the technology, based on a belief that most big grocery stores would eventually replace about half their manned counters with automated ones.

The European market could be even bigger, she said.

Uniquest this month launched a plan to market its software with International Business Machines Corp. in Europe, Africa and the Middle East.

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Major grocery stores are interested in the technology but are skeptical that it will pay for itself. Grocers have one of the slimmest profit margins of any industry and pocket less than 1% of all revenue.

“Cost is one of the major issues. We want to be certain that it will bring more productivity, and that customers will be happy with it,” said Michael Rourke, a spokesman for A&P.;

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Uniquest charges about $17,500 for each automated checkout counter. There is no other U.S. company with a competing product now, according to industry experts.

Labor union concern about lost jobs is another sensitive issue.

The new technology would eliminate some cashier’s jobs, although employees would still be needed to sort out problems with the equipment and to accept payment.

The technology comes at a time when the grocery industry is experimenting with various kinds of electronic payment systems, shelf labeling, in-store video advertisements and other ways to make shopping more convenient.

“The jury is still out on the automated checkout technology,” said Edie Maleski, a spokeswoman for the Food Marketing Institute. “The litmus test is whether the consumer finds it a convenience or an irritant.”

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