U-Check in the Black
Written by Robert McKinley Published: 20 January 2000
Neldon Johnson, president and chief executive officer, International Automated Systems, Inc. announced Wednesday that the company’s pilot U-Check store in Salem, Utah, which opened officially to the general public in March 1999, has captured approximately 50 percent of the local grocery market and is running solidly “in the black.” The U-Check store is the world’s only fully self-cashiering supermarket. It features 12 of IAS’s patented automated check-out lanes.
Johnson believes that while U-Check’s volume continues to grow, its current status is remarkable. “Our volume has developed within a relatively short amount of time. The supermarket still expects to see a significant increase by the end of the first calendar quarter; however, I am amazed at the high level of customer acceptance, particularly because U-Check is surrounded by four major chain-store competitors, each within just a five-minute drive,” Johnson said.
The store, which has experienced a 100 percent increase in dollar volume since its first quarter of operation, also offers its customers a biometrically secured debit card, called the “U-Check Card.” The U-Check card is a “magstripe” card containing personal banking data, cross-referenced to the individual’s real-time three-dimensional fingerprint. Upon processing a transaction, by providing a positive identification and allocating funds to be credited to the supermarket’s account, IAS’s state-of-the-art three-dimensional fingerprint identification system assigns a unique fingerprint identification number that becomes embedded in the transaction information. In so doing, the IAS system obviates the need for an employee to take a check and virtually eliminates credit/debit card fraud and charge backs, while preventing duplicate transaction postings. The U-Check card has been available for only four months, and already approximately 30% of the households in Salem utilize one.
The U-Check system, which can toggle between fully automated and cashier-attended service, provides complete back office functions such as inventory and cost control, ordering and accounting, reducing customer check-out time while reducing personnel and operating costs. Johnson noted that the average dollar amount of sales to persons using the U-Check card has been steadily increasing and, according to numbers available from the Food Marketing Institute, the average amount of U-Check’s transactions (approximately $35.00) now exceeds the industry average by nearly 100 percent.
“U-Check’s overhead reductions have resulted in economies of scale, and supermarket profitability that exceeds industry standards by several percentage points, even in communities where a full-service grocery presence would otherwise be cost-prohibitive,” said Johnson. He indicated that the company plans several additional corporate and franchise stores within the next 12 months. “We believe we are structuring the store of the future. We find it hard to envision that a traditional supermarket with 14% labor cost could compete with one in which the overhead has been reduced to 2%.
IAS will also market single- and multiple-unit cashiering systems to additional independent supermarkets as well as other point-of-sale retail operations, including age-restricted vending machines. According to Johnson, most stores installing the IAS system can expect a return over cost within a 12-month or shorter period. IAS also expects to launch a time and attendance mechanism (personnel time clock) based on its AFIM (automatic fingerprint identification machine) technology during the first calendar quarter.
International Automated Systems, Inc., a pioneer in biometrics, develops and markets high-technology products designed for increased business efficiency, transactional security and access control.
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