MEAT BOARD DEVELOPING COMPUTER PRICE PROGRAM

LAURA KLEPACKI

MINNEAPOLIS -- A new computer program is being developed by the National Livestock and Meat Board to assist retailers in the pricing and promoting of meat products.

Using the acronym Champps, meaning Corporate Headquarters Assisted Meat Pricing and Promotion System, the program should be available by next year, said Dick Shulman, president of Richard Shulman Associates, a consultant to the board.

The new computer program is building upon the Computer Assisted Retail Decision Support program, which is a cutting guide for retailers to better evaluate a product's yield.

Shulman introduced the new program at the American Meat Institute-Food Marketing Institute Meat Marketing Conference here two weeks ago.

By using scanning sales data collected at the front-end, Champps will enable retailers to plan future pricing and merchandising strategies for meat products based on what they had sold in the past, said H. Ken Johnson, vice president of meat science for the Meat Board, who is involved in the project.

"For the first time, the business will be basing decisions on what they sell, rather than what they buy," said Johnson. "Retailers will be able to look at product movement and make decisions regarding product mix," he said.

Champps is designed to organize the scanning information collected at the front-end and incorporate it with other information the retailer possesses through CARDS, including product costs, and labor and processing costs, to determine what a product's total cost is.

"We've got to stop pricing product from instinct and past

experience, and price product based on what it costs," said Shulman.

Once the industry has a better handle on what total costs actually are per meat cut, then individual retailers can decide their meat pricing philosophy, said Shulman.

In order to implement Champps, though, the meat industry must improve the accuracy of the sales data collected through scanning at the checkout.

Shulman urged retailers to improve industry data collection by strengthening their internal meat product coding by following the Uniform Retail Meat Identity Standard Program set by the industry several years ago.

Improved flow of scanning information from the front-end to meat departments will help move the department into category management, and ultimately to Efficient Consumer Response, said Shulman. ECR is an industry movement toward reducing costs by streamlining the distribution system.

Regarding ECR, said Shulman, "if we don't know as an industry what our cost structure is, we can't talk with our suppliers about how to cut some of those costs out of the system.

"The important thing to understand is the rest of the buyers and merchandisers in companies leaning toward category management have access to national scanning data and market level scan data, so that they know if they are getting their fair share of the cheese business, for example. We don't know that."

He said that meat departments are lagging behind other store departments in terms of actually knowing what is sold and at what prices, and what their market share is.

There is a consensus in the meat industry that it is moving from a production-oriented focus to a consumer-oriented focus, said Shulman. "We are moving to a new standard in which merchandising at store level is going to at least have equal importance with store production."

Additionally, he said, "we must know the pricing structure of the meat case, otherwise we can't evaluate bringing case-ready to the meat department."

Case-ready, or meat products that are prepackaged and brought to the retail store ready to be displayed, has been lauded for reducing shrink, out of stocks and backroom labor.

But critics of case-ready question product quality and point to the higher initial costs and potential loss of jobs for meatcutters at the retail level.