SALT LAKE CITY -- American Stores Co. here is upgrading technology in two divisions, including installing new customer-payment terminals that enable stores to process transactions through the chain's in-house financial switch, a move projected to save more than $1 million annually.
This month, the first store in the Acme Markets division, Malvern, Pa., will install the terminals and go on-line with the corporate financial switch. A handful of stores in the Jewel Food Stores division, Melrose Park, Ill., already did so earlier this year, according to a source familiar with the project.
Average credit and debit approval time is 6.2 seconds for stores processing payments through the switch.
By processing Jewel and Acme's debit and credit transactions directly with Bank of America, rather than through a third-party service provider, American Stores will save more than $1 million each year, the source told SN.
Savings were not calculated for the Lucky Stores divisions, San Leandro and Buena Park, Calif., because those stores have been using the switch since its development 10 years ago.
The new customer-payment terminals, from VeriFone, Redwood City, Calif., integrate with new point-of-sale systems installed at Acme last year as well as new POS equipment to be installed at Jewel this year. The previous terminals operated in a stand-alone environment.
Frank Eckstein, vice president of Delta Store Operations at American, said the front-end upgrades and new labor-management software will enable stores to service shoppers better.
"Our goal is to exceed customers' expectations," he said in a statement. The new technology "improves front-end throughput and the labor management system allows us to maintain appropriate staffing levels throughout our stores' operations."
The new labor management software, from TimeCorp, a subsidiary of VeriFone, is currently being piloted in the Lucky Stores divisions, a company source said. By year-end "a few hundred stores" should be using labor-management software, with the remainder of American Stores divisions operational by 1998 or 1999.
The labor-management software implementation represents a significant upgrade for American, which had used computerized scheduling in the past but not at such a sophisticated level.
"We've done labor scheduling and time and attendance in some shape or form in all divisions in the past, so in that sense it's an upgrade, although I make a distinction between 'labor scheduling' and 'labor management.'
"With 'labor scheduling' you've got a database and a spreadsheet and you're pulling in employees' names, labor rates, availability and things like that," said a source at the retailer. "It's still very labor-intensive.
"Whereas 'labor management' takes into account sales and demand forecasting in 15-minute increments," he said. "You push a button and it gives you a schedule -- of course you still have to massage it but in my mind those are distinct differences."
A distinguishing component of various labor-management systems, he added, is their ability to forecast activity.
"The hardest part of true labor management is the sales forecast model. Once you've got that, plugging in available people is not all that difficult. That's where [software] vendors differentiate themselves -- in the forecasting engine."
Eckstein was unavailable for comment but in a statement said, "Our review process for a labor-management system was extensive."
Labor management will be rolled out to front-end operations initially "because that's where the volatility, volume and dollars are. And it's easier to schedule the front end than scheduling the deli department, for example, because there are so many backloggable, noncustomer-in-your-face-driven activities in the deli," the other company source said.