A Letter from the Dean
Stern Chief Executive Series Interviews
Location, Location, Location
The Rise of Silicon Alley
Internet Business Models
The Brave New World of Telework
Forecasting Online Shopping
The Ultimate Capitalist Tool, Language
What History Teaches Us about the Endurance of Brands
Supermarket Checkout Roulette
Banking on International Financial Stability
Endpaper

 

These days, New York is one of the safest cities in the world. But there are some places that remain remarkably treacherous: supermarket aisles. Larry White guides us through the Express Lane.

ife in modern New York engenders a great deal of uncertainty, even anxiety. For many residents of Gotham, the basics of everyday life are frequently a question of chance: finding an affordable apartment, hailing a taxi during rush hour, getting a reservation at that hot new Asian/Italian/Peruvian restaurant. And every day, hundreds of thousands of New Yorkers involuntarily take their chances in another game of chance they surely would prefer not to play: supermarket checkout roulette.

When shoppers load up their carts at D’Agostino’s or the Food Emporium, and head down their final aisle, a series of questions pop up: Which is the fastest checkout line? How many people are in which line? How full are their shopping carts? Which checkout clerk is the speediest? Will the woman in front of me decide to write a check? Or ask for a price verification? Will the store manager have to come over?

To top it all off, we risk being flattened by speeding shopping carts when a new checkout line suddenly opens. Indeed, the traffic jams of maneuvering carts frequently rival those of the approach to the 59th St. Bridge at rush hour.

In recent years, the supermarket industry has introduced some wrinkles that it plainly believes will improve shoppers’ odds. But while well-meaning, these efforts have largely failed. The “ten items or fewer” line doesn’t really solve the problem. Our anxiety levels are just as high when we scrutinize the baskets of the people in front of us and wonder whether we should challenge the man who clearly has thirteen items in his basket. Does the “two cans for a dollar” special count as one item or two? How about two six-packs of Sprite? Do they comprise two items or twelve? And while barcode scanners at checkout counters have been beneficial, they haven't really eliminated the roulette game.

Of course, this is one area of retailing in which New Yorkers can comfort ourselves that we’re not at a disadvantage. Supermarkets throughout the country have persisted in this entirely archaic checkout system for decades.

ut there is a better way – and one that is based on sound economic principles. For at least thirty years, many banks and airlines have served their customers through a system of “one line serves all.” All customers form a single line and then proceed to the next open teller or clerk, whether they are cashing twenty-five checks worth $500,000 or depositing two rolls of quarters, whether they are buying a ticket to France or vainly attempting to get a better seat. Even the legendarily logy Post Office has adopted this system. And the “take a number” system employed by bakeries, butchers, and delicatessens is partly designed to accomplish the same end.

Now, as any management expert could tell you, the one-line-serves-all method doesn’t speed customers through service lines any faster – on average. But it does have the salutary result of reducing variance and the elements of luck. And as any psychologist could tell you, that surely reduces anxiety. For New Yorkers, what could be of greater value?

So, why haven't the supermarkets followed the lead of their counterparts in banking and airlines? Could this all be a conspiracy by the tabloid publishers, who want shoppers to linger in line and buy their latest alien revelations? But the current system isn’t any slower on average; it just increases variance and anxiety. So, the tabloids could still have the same average shot at you in that single waiting line. Tempting as it is, we can not collar them as the villains.

n its defense, the supermarket industry would probably complain about the scarce (and expensive) square feet of selling space and the extra problems of shopping carts. But this would just be an alibi to cover their sluggishness. Space is scarce for every retailer in New York, and shopping carts are simply an extra complication, not an insuperable barrier to change. Anyone who wants to see how the one-line-serves-all system could be successfully adapted to similar retailing should pay a visit to any Old Navy store.

Supermarkets may also pull out a trump card: technology. After all, we have been told that customer-held checkout computers, which will eliminate unpredictable lines and hence anxiety, will appear imminently. With all due respect, people who believe this claim have been reading too many of those tabloids while waiting for the store manager to verify the price of asparagus.

Can the academic business literature help explain why the supermarket industry has been so slow? Unfortunately, standard microeconomics is not much help here. There are enough supermarket chains remaining in this country so that at least one of them would have experimented with one-line-serves-all. But it hasn't happened yet.

And this state of affairs can’t be a problem of “network economics.” Unlike the prevalent and highly efficient barcode/scanner technology, which required group action and cooperation between manufacturers, distributors, and retailers, the rearrangement of a supermarket floor layout to accommodate one-line-serves-all could be undertaken by a single actor. All it would take is one brave supermarket. But, again, it hasn't happened.

It is this economist’s humble opinion that we need to explore more sociological dimensions. Supermarkets, after all, are a relatively old industry. (They date to the 1930s.) And it is one in which technological change – or even any kind of change – does not happen often. The last major innovation in supermarkets (aside from the bulk-food sections) was the bar code/scanner technology, which is now over 20 years old. We have to go back to the 1950s – and the cash register that automatically calculates and dispenses change – to find another leap forward.

One major innovation every 20 years seems to be the norm for this industry. And if the hand-held checkout computer is the current focus of industry attention, then I fear we may have to wait another 20 years before one-line-serves-all is even considered. In this age of rapid technological improvement, surely the supermarket industry can do better than that.

Ralph Waldo Emerson told us that the world would beat a path to the person who invents a better mousetrap. I'll settle for a better supermarket checkout system, and I will be eager to take my business to the chain that develops it first.

Lawrence J. White is professor of economics at Stern.