The Case for Item Pricing Repeal

'Margins are margins. Labor budgets are labor budgets'

A friend of mine who works at a Kroger in metro Detroit passed along his thoughts on the "Item Pricing" law, and I figure they're worth sharing:

Snyder's right. It's a waste of time for us and basically a game for customers to "Item Price" us. The Item Pricing Law gives folks five times the difference if they are overcharged with a $5 maximum. Fortunately the game players are only allowed to do this with one item at a time, so if we're dealing with a lot of price changes this is the one break the store gets.

Overcharging can be based on the advertised price, the marked price, the shelf tag price (or last week's ad price if one has failed to remove the expired "yellow tag") so there's a lot that can go wrong. We try to correct errors immediately at the register in the customer's favor. Still, we miss some and crafty shoppers will pay the wrong price intentionally and then they'll tie up the Customer Service desk with Item Pricing rewards. A good compromise would be to rescind item pricing and keep the Senate Bill penalties.

Savings from repeal of Item Pricing will mostly be poured into better customer service with more time, less bother, less confusion when there are TONS of price changes, up and down, that are coming down from headquarters.

The union will stick to that shibboleth about more hours and jobs. I see it differently. Margins are margins. Labor budgets are labor budgets.

Little would change if the law were repealed. Things would be less backed up in the back room. More stuff would be better stocked and therefore we'd have more sales. Item pricing means digging into a pack of 24 candy bars and pricing every d**n one. Every box. Every flavor. Every brand. More sales mean better labor budgets. Labor hours are based on a calculus from store sales. More sales mean more hours, not more tasks means more hours, regardless of union cant. Of course, this would help our competition too, particularly independents and small time operations. It'll be a world of good for the industry if the law is repealed. Leave penalties for faulty pricing and relieve the wasted time of redundant pricing.

Gov. Snyder's call for repeal of the state's Item Pricing Law was a definite positive whose value should not be underestimated. There are 10 million people still living in Michigan and just about every one of them, rich, poor, and in-between, needs groceries. Item pricing repeal will save a lot of money (more than $2 billion by one estimate!) across an entire state where money is tight.

(My original post described the author of the message as a manager.  This was a misunderstanding on my part.)