PRICE CHOPPER EXPANDS EAS TECHNOLOGY TO 20 STORES

DEENA AMATO-McCOY

SCHENECTADY, N.Y. -- Price Chopper Supermarkets here is continuing its expansion of radio frequency electronic article surveillance through the installation of the loss-prevention systems in three more stores this month.

This expansion lengthens Price Chopper's list of EAS-equipped stores to 20 units. The retailer's objective is to achieve a 20% reduction in the stores' shrink levels, according to David Proper, vice president of loss prevention and internal auditing for Price Chopper.

"If we can achieve this goal, then we will evaluate the system and discuss expanding the technology into additional stores," he said.

Though the 94-store retailer will be monitoring the loss-prevention system's results to see if they warrant further expansion, Price Chopper does not intend to use the technology chainwide.

"Not every store will be successful if it gets RF EAS technology. Therefore we are only focusing on stores that currently have a high incidence of external theft, or have experienced high shrink statistics," he explained.

The retailer currently attaches the RF surveillance tags, provided by Checkpoint Systems, Thorofare, N.J., to high-ticket items, including packaged meats, film, batteries, videos and vitamins.

Price Chopper has installed security gates at the stores' exit doors, which sound an alarm and flash lights if a labeled product passes through that has not been deactivated. Deactivation takes place at the point-of-sale, via an antenna integrated into the POS system. The security tag is deactivated when a product's bar code is scanned during checkout.

Though the system is being implemented primarily to combat shoplifting, Price Chopper expects to see reductions in internal theft through the system as well.

"We think the system is a psychological deterrent to fight internal theft," Proper said. "The reduction of internal theft is harder to measure through the use of the RF tags, but it is a fringe benefit."

Following a year-long test of the EAS system in three stores, Price Chopper began an aggressive rollout of the technology. Thirteen of the 20 stores with the system went live since last November. The retailer expects to see a return on investment within one year of using the system, according to Proper.

While the retailer expects to see significant results, Price Chopper views the EAS system as an addition to its current loss-prevention measures. "We also utilize closed-circuit television systems as well as less-technical 'mystery shoppers' [monitoring store aisles]," said Proper. "EAS is another tool to assist us to control our losses and increase our profits."

The key to the system's success, according to Proper, is the training of associates to stay disciplined. "We are training them to monitor product tagging and even rotate labeled products," he explained. "By maintaining the products and pattern diversity, we think the system will be beneficial for us."

One area the retailer hopes to develop in the future is the adoption of source tagging by manufacturers. "By utilizing source tagging, we can get our product with the RF tags already integrated into the product's Universal Product Code," Proper explained. "This would help us to virtually eliminate the labor costs associated with applying the units to products.

"Unfortunately, many manufacturers have not accepted the concept yet," he added. "Though some companies have started source tagging, there are not enough that it is at a point to really benefit us."