LANSING – A study commissioned by the Michigan Retailers Association showed the state’s current item pricing law provides no consumer benefit, when measured against newly available technology, and costs some $2.2 billion annually.

The study, by the Anderson Economic Group, showed Michigan residents are now paying about 9 percent more than similarly-situated residents in other states to cover the costs of tagging every item in a store.

Governor Rick Snyder made similar arguments of inefficiency in calling for repeal of the law in his State of the State Address.

Scott Watkins, primary author of the study, said a typical larger grocery store moves about 5 million items every year. At about 1.5 seconds per item, that means about 2,000 hours per year in a larger grocery store and about 5,800 hours per year in a general merchandise store that can move as many as 14 million units.

It was unclear, he said, how much time is spent repricing items for sales and other price changes. And some larger retailers spend as much as $10,000 annually on price guns, stickers and ink, he said.

The paper also looked at a study by the Emory School of Law, conducted in 2003 and updated in 2005, that showed items in counties in New York where item pricing was required cost 25 cents, or about 9.6 percent, more than the same items in similar communities in New Jersey, where item pricing is not required, and about 15 cents more than in communities in Connecticut, which requires electronic shelf tags.

Watkins said there were not similar communities close enough to any Michigan communities to make similar comparisons, but he said the methodology of the other study showed a 9 percent cost for Michigan’s item pricing law would be valid.

James Hallan, president of the Retailers, said there is new technology available that would not only help customers to see the price of individual items but that would allow them to track the total cost of their shopping trip, including any sales or multi-item discounts.

“It’s difficult for retailers to introduce that new technology under current law,” he said. The cost of the current pricing system makes any new system prohibitively expensive.

The scanners would also be more accurate, Watkins said. “More often you’re going to get an item that rings up below the price marked on the item,” he said.

Watkins also noted that current social networking and other communications methods would make it a disadvantage for retailers to charge more for an item at the register than they have it posted on the floor.

Watkins said the law also, at least in recent years, has not meant more retail employees. Michigan averages 12.8 employees per establishment, below the national average of 14.2 employees.

But the state does have 4.3 employees per $1 million in sales, ranking it 41st in a tie with six other states. The national average is four employees and only Wisconsin (4.4 employees), West Virginia and Iowa (4.5 employees each) average more. Washington ranked first on the survey with 3.5 employees per $1 million in sales.

Hallan did not, however, expect that retail employment would fall if the item pricing law was repealed. “You’ve got a clerk with his back to you pricing an item rather than facing you to provide assistance,” he said of the current situation.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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