HANNAFORD INSTALLS IP PHONES AT STORE, DCS 2004-01-05 (1)

MICHAEL GARRY

SCARBOROUGH, Maine -- Hannaford Bros. has deployed a centralized digital phone system based on Internet technology that so far is serving one store and two distribution centers and will become a template for new stores.

Based on technology from Cisco Systems, San Jose, Calif., Hannaford's phone system is one of only a handful used by retail operations in the U.S., including supermarkets, said a Cisco spokesman.

According to William L. Homa, Hannaford's chief information officer, the system is serving a new Hannaford store in Westbrook, Maine, that opened in August, and was installed in November at a Hannaford DC in South Portland, Maine, and at a Kash n' Karry DC in Plant City, Fla. It will be used at all new locations as well as at stores and DCs that have "outgrown their existing systems," he said, adding that Hannaford has no plans yet to retrofit existing stores with the new system.

Hannaford and Kash n' Karry, Tampa, Fla., are divisions of Delhaize America, Salisbury, N.C. Hannaford recently took over management of Kash n' Karry's IT support, said Homa.

Hannaford's new phone set-up consists of both wired and wireless IP (Internet Protocol) handsets at the store and DCs, with call management and maintenance centralized at Hannaford's headquarters here.

Any changes can be effected via a software change from headquarters, eliminating the need to send maintenance personnel to stores or DCs, Homa noted. At the store or DC, the system leverages the same local area network, both wired and wireless, over which electronic data moves, eliminating the need for a separate phone network.

Hannaford sends voice calls with data feeds to its headquarters through its wide area network (based on asynchronous transfer mode) in a voice over IP (VOIP) scenario, bypassing public phone networks. But the system can also access a standard dial tone for external calls.

While the Cisco system represents a definite return on investment for a new store or failing system, Homa said it is not clear that an ROI would be achieved for removing a functioning system in favor of the Cisco application. "The capital outlay is less and the ongoing maintenance is less" with the new system, he said. The headquarters equipment, which Hannaford set up to handle 10,000 extensions, runs in the "tens of thousands of dollars" he said.

Homa described the new phones as "basically computers" with Web access that can receive data as well as calls. He said voice quality is "indistinguishable" from standard phones, but cautioned that the system requires more "network expertise" than conventional phone systems.