LOBLAW EXPANDING SHELF-LABEL PROGRAM

GAIL ROBERTS

TORONTO -- In a further sign of the growing industry interest in advanced shelf-labeling technologies, Loblaw Supermarkets here will expand its electronic shelf-labeling program to as many as 60 more of its Ontario stores.

The rollout follows four years of working with the shelf-labeling system, manufactured by Telepanel Systems here, in eight Loblaw stores. The wireless system communicates with the store's cash registers using a two-way radio frequency. It is distributed in North America by IBM.

The move by Loblaw closely follows announcements by several major chains in the United States of anticipated rollouts of electronic shelf-tag programs. Vons, Arcadia, Calif., for example, is implementing a shelf-labeling system, made by ERS International, Wilton, Conn., in 26 of its stores. ERS's wired system uses powered rails.

Both systems cut labor costs by taking the manual work out of changing paper labels on shelves. The systems also ensure pricing accuracy by coordinating the prices between shelf edges and point-of-sale check stands.

"We feel confident that this system is performing the things we want it to do and that's why we are proceeding," said a Loblaw executive, who asked not to be named. "We went with the wireless system because it leaves us some flexibility to move around, to change the configuration of our stores if we want.

"The time was right to proceed," he said. "We had worked with Telepanel for a number of years."

Loblaw will install the system in more than 20 stores by the end of this year, the first year of a two-year

contract.

The systems cost between $80,000 and $110,000 for the installation of between 8,000 and 12,000 labels. Stores also have the option of installing fewer labels. The Loblaw deal is worth upwards of about $4 million, said Chris Skillen, Telepanel's president and chief executive officer.

"Many grocery stores can achieve their objective with 8,000 to 12,000 labels," said Skillen. "Our system's wireless nature, we believe, makes it fundamentally more reliable. "It's also less expensive to own because you don't have the maintenance requirement you have with wired rails."

Telepanel's system is being tested by a number of retailers in the United States, including Kroger Co., Cincinnati; Montvale, N.J.-based A&P, and Giant Food, Landover, Md. Most of those tests are in single stores.

ERS similarly is being tested by a number of retailers. Recently, H-E-B, San Antonio, said it would install ERS's system in six stores and possibly roll it out to 44 more, if the tests are successful. Edwards Food Stores, Windsor Locks, Conn., is expected to decide by the end of this month if it will roll out either Telepanel's or ERS's system to 30 stores in its Connecticut division.