SCARBOROUGH, Maine -- Hannaford Bros. here is rolling out a $2.3 million satellite network to link its 100 stores in the Northeast.
The network will simplify communications among stores by putting them all under one network and save the retailer an estimated $500,000 a year in data transmission costs.
Hannaford is leasing satellite time from Scientific-Atlanta, the Atlanta-based communications network provider. Last month the chain purchased and installed on-site VSATs, or very small aperture terminals. The contract with the firm is for five years.
Two of Hannaford's applications already have been switched over from the terrestrial-based telephone line leased network: point-of-sale systems, which transfer pricing data to stores and item movement information to headquarters, and electronic payment systems.
Other applications to be transferred to the satellite network include the retailer's electronic mail, pharmacy system and its energy management program, which allows headquarters to control energy expenditures at stores.
The satellite system can accommodate a range of other on-line applications, including electronic marketing systems, automatic teller machines, and time-and-attendance programs.
"When you lease a phone line, it's more expensive to transmit data the farther away you are. When we looked at the geographical locations of our stores, we realized we were past the break-even point and that we could save money if we switched to a fixed-cost satellite network," said Pete
Johnson, manager of technical support at Hannaford.
"It also simplifies our network operations here because we're consolidating our applications on a single network. When the applications were on land lines, each in some way had its own little network," said Johnson. "Now, all applications are basically controlled and monitored under one source."
Two other major retailers also are opting for satellite-based data transfer. Kroger Co. is near completion of deployment of a 1,100-site VSAT network. The retailer operates a private satellite master station, or hub, near its Cincinnati headquarters. "We think it's going to be a tremendous productivity improvement for the company," said Paul Bernish, Kroger's corporate director of public relations. "As our information needs continue to expand, this satellite network is a state-of-the-art way to manage those information needs."
Bernish said it was too soon to quantify savings. Right now pricing and inventory data are being transmitted between stores. By summer, the stores will be linked to Kroger's manufacturing plants, further streamlining the retailer's ordering process.
A&P, Montvale, N.J., completed installation of a 500-site VSAT network last year. A&P was the first national supermarket chain to fully deploy a private satellite network.
Fifteen U.S. supermarket chains have either completed or are in the process of completing installations of VSAT networks, representing more than 3,400 stores. The number of supermarkets now serviced by Scientific-Atlanta is 1,830.