Supermarkets Grocery-Cart Wars

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As Helaine Alpert steers her shopping cart down one aisle and up another at the Food Emporium in Scarsdale, N.Y., an overhead electronic billboard flashes the specials of the day. On the rim of Alpert's cart, a 6-in. by 9-in. video screen automatically displays a list of specials in each aisle she passes. Electronic alert: Cup O' Noodles on sale, two for $1; veal chops, $6.99, a dollar off the regular price. "I used to scour all the flyers for bargains," says Alpert, a lawyer from nearby Edgemont, but now the computer takes care of that. Her basket filled, she takes her place in the check-out line. But rather than browse through the National Enquirer or Redbook, she passes the time playing a trivia game on the cart's computer. "It's surprising the way they're making shopping more convenient and less boring."

If President George Bush was amazed by the bar-code scanners he saw last month at the National Grocers Association convention in Orlando, he would be truly astounded by some of the technology found in state-of-the-art supermarkets like the Food Emporium. At Vons, a 283-store chain based in Arcadia, Calif., "talking" aisles are equipped with computerized voices that explain products to shoppers. At St. Louis-based Schnuck Markets, electronic "price tags" have replaced paper shelf labels. These new digital labels are linked to a central computer that changes shelf prices for 2,000 to 4,000 items a week and coordinates them with check-out registers. And at Safeway, the nation's third largest chain (after American Stores and Kroger), customers can shop from home, using a computerized catalog system to order anything from apricot jelly to zucchini. Shoppers can transmit an order, charge it to their credit card, and have delivery arranged -- all without a word to anyone at the store.

Not long ago, the most sophisticated piece of technology in most food stores was the produce scale. A grocer's idea of mass marketing was the weekly circular. Growth was taken for granted. But the nation's 31,000 supermarkets today face a different world. After expanding more than 5% a year during the 1980s, they have seen growth slowing since 1989. Last year sales grew only 2%, to $376 billion, largely because of the recession. Now profits are being squeezed more than the Charmin as stores struggle to cope with mounting takeover debt. Six of the top 12 supermarkets, including Safeway, Jewel and Lucky, were snapped up in buyouts during the past decade. The survivors face more competition than ever before. It is not uncommon to find three or four national chains -- not to mention a mass merchandiser like K Mart or Wal-Mart -- competing in the same territory. With tougher times ahead, grocery chains are turning to computers to gain a competitive edge.