HD6 - Report of the Joint Subcommittee Studying Item Pricing

  • Published: 1983
  • Author: Joint Subcommittee Studying Item Pricing
  • Enabling Authority: House Joint Resolution 301 (Regular Session, 1981)

Executive Summary:
In the 1981 Session of the Virginia General Assembly, several consumer issues dealing with retail grocery stores were requested to be studied. One of these, considered in House Joint Resolution No. 301, dealt specifically with the study of the removal of the prices on individual items as opposed to the sole use of the Universal Product Code (UPC) – a set of black lines and numbers that now appear on ninety-five percent of all packaged grocery items. The code allows optical scanners set in check-out counters to identify each item by product and cost to potentially reduce the chance for human error and shorten check-out time. The UPC scanner system was not the issue of this study and all members of the joint subcommittee favored the concept, which is seen by the supermarket industry as the "greatest advance in retailing since the tin can." The heart of the study centered on a by-product of this innovation, the removal of the familiar hand-stamped or paper label on each item which indicated the exact cost of that item. At the present time, at least six states have enacted legislation to mandate item pricing and others have various controls over such until further studies on scanning techniques can be accomplished and evaluated.

The UPC scanning system was first introduced in 1974, but only one in ten food stores has abandoned traditional cash registers in favor of the scanner. Technology is slow in catching on, but one prohibition to conversion by many is the initial cost. In 1981, installation costs in a four-lane supermarket could run as high as $125,000. The National Association of Retail Grocers has predicted that within five years most of the nation's food sales will go through scanners. (Appendix I contains a listing of all stores in Virginia which have switched to the scanner system.)

During the process of the three hearings held by the joint subcommittee, testimony was presented by both consumers and representatives of the food industry. These two groups were also represented on the membership of the joint subcommittee. Most testimony centered on the relative value of UPC scanning which, although an important issue, was not the focus of the study. Advantages as well as disadvantages of the system might well be mentioned here in order to provide a total picture.