GIANT LOOKS TO EXPAND SBT TO SAVE ON LABOR

DAN ALAIMO

LANDOVER, Md. -- Giant Food here is looking to expand participation in its scan-based trading program beyond the four direct-store delivery vendors now using it, said Ed Null, electronic data interchange business systems analyst.

Null said significant labor savings from not having to check in orders and handle returns was one of the major reasons for the expansion.

The retailer has not quantified that savings, he said.

"We love it because it reduces labor in stores and that is a big savings when you multiply it across the chain," he said.

However, Giant is not alone.

Becky Pickett, development manager, e-business, Ahold Information Services, Greenville, S.C., said once Ahold develops a single DSD system for all its chains, a rollout of SBT will follow.

"Right now each company has its own DSD system and they are limited in what they can do," she said.

Pickett did not know when Ahold's companywide DSD system would be implemented.

She noted that Stop & Shop, Quincy, Mass., is the only other Ahold company now using SBT, and that is on a limited basis.

Officials from Giant and Ahold talked about their plans for SBT at last month's U Connect Conference in Orlando.

With SBT, DSD vendors bring their products into the store without check-in.

They also merchandise their sections and displays, and handle their own returns.

The companies are paid on the basis of what is scanned at the front end.

Giant has implemented SBT -- known at the company as "pay-off scan" -- with four diverse vendors: Edy's Grand Ice Cream, Oakland, Calif.; the Washington Post, Washington, D.C.; Schmidt's Baking, Baltimore; and Model Imperial, Boca Raton, Fla.

The retailers first pilot, with Edy's, was in 1992, and Model Imperial, a cosmetics supplier, was the most recent to participate, joining the program within the last year.

The retailer is now looking for additional participants, Null said.

With the systems in place, "bringing up a supplier is really just cookie-cutter, from Giant's perspective," he said. "Giant could bring them up in rapid succession.

"Everything is in place on our end. It's the negotiation of the shrink, and the systems that have to be put in place on the supplier side that is really at times the killer on the other end," he said.

One of the biggest obstacles to implementing SBT is concern about shrink.

But cosmetics and greeting cards are the highest shrink categories for supermarkets, Pickett said. Giant is having success with cosmetics and Wal-Mart Stores, Bentonville, Ark., is handling greeting cards on a SBT basis.

"So if you can get those two categories working, you are probably in real good shape," she said.

In SBT programs, shrink rates are negotiated between the retailer and vendor, Null said.

"Everything is negotiable. Cosmetics has a very high shrink rate, but Model Imperial wanted their products in our stores so badly, they were willing to do pay-off-scan to get them in there," he said.

Newspapers also present special problems when it comes to SBT.

But, Tony Mineart, director of circulation, single copy and retail sales for the Washington Post, said his publication has overcome most of the obstacles in dealing with Giant's SBT program.

"If it works for newspapers, it will work for any DSD product," he said.

One key is making sure the newspapers are not merchandised in front of the checkouts where cashiers will be tempted to key them in without scanning.

"Anything positioned outside of the store's sales zone will fail" at SBT, he said.

For example, with newspapers, some customers will try to slide a USA Today inside The Washington Post, but because of their awareness of the SBT program, cashiers will check inside the paper before checking it through, he said.