STUDY: EFFICIENT BAGGING COULD CUT EXPENSES 25%

DEENA AMATO-McCOY

NEW YORK -- A study examining cost issues related to supermarket bagging operations shows that by increasing the items packed into paper and plastic bags, supermarkets could save up to 25% annually.

Ten independent ShopRite stores, divisions of Wakefern Food Corp., Elizabeth, N.J., participated in the study that examined 5,000 bag transactions over a six-week period.

The study revealed that a typical supermarket spends $113,400 each year for regular paper bags, including expenses related to labor, storage and transportation of the bags. That cost could be reduced by $29,500 by packing 12 items in a paper bag rather than the average 6.3 units, according to the study, sponsored by the American Forest and Paper Association, Washington.

John Schellinck, vice president of engineering, retail and corporate for Wakefern, said, "Survey results will be made available to Wakefern members to review bagging operation costs within their stores."

The study, conducted by Willard Bishop Consulting, Barrington, Ill., and released last month, also identified savings potential for plastic bag costs.

Annual costs for plastic bags, which are about $87,300 per store on average, could be reduced by $21,500 if eight items are placed in each bag rather than the average 3.8 items, according to the survey.

Another way for supermarkets to cut bag costs is to offer a paper bag reuse program. Results indicate that supermarkets can save approximately 4.4 cents per paper bag based on labor and bag costs if shoppers return their bags.

The study shows that the cost of a regular paper bag is 8.25 cents, an expense that is increased to 13.38 cents when staff double up on paper bags.

"If a supermarket offers a rebate to the customer for returning the paper bags for reuse, additional revenue will be earned that could be used to offset expenses at the front end," said Paul Weitzel, senior associate for Willard Bishop Consulting.

Weitzel explained that if a 100-store chain offers consumers a 2-cent rebate per bag, and the store gets 10% of shoppers to participate, approximately $337,500 could be saved per year chainwide.

Among the 600 Wakefern shoppers surveyed about bag reuse, 35% said they would participate if they received a rebate of up to 4 cents per bag.

Though 51% of consumers said they would prefer a 5-cent rebate to participate in a reuse program, "calculations show that offering a rebate of more than 4.4 cents would incur more costs, rather than reduce them," Weitzel told SN. "Any refunds over 4.4 cents are more expensive than the cost of a new bag."

The study also shows that changing the strength of bags rather than doubling bags when packing items can further reduce costs for supermarkets.

On average, stores whose staff double plastic bags are spending $158,200 annually, including bag purchase and labor. Doubling paper bags accrues annual costs of $194,600, and paper bags inside plastic bags add up to $152,200 annually, according to the study.

The more durable plastic bags cost $92,400 annually per store but can save in labor and materials because the staff will no longer have to double bag.

Stores that want to provide their customers with the stability of paper sacks can consider using paper bags with handles. This option will cost stores $149,000 annually, while eliminating costs incurred by doubling paper sacks into plastic bags for the convenience of handles, according to the study.