Bill to Ban Alcoholic Beverage Sales at Self-Service Checkouts Would End 'Self-Service Only' at California Fresh & Easy Neighborhood Market Stores

News/Analysis


On August 4, California State Assemblymember Hector De La Torre (center at the podium above) and supporters held a press conference at the California State Capital in Sacramento to promote passage of AB 1060, which would ban the sales of alcoholic beverage items at self-service checkout lanes in California grocery stores. Above is a brief video of the press conference.

To paraphrase the late General Douglas MacArthur, who said in his farewell speech to the U.S. Congress in 1951, "Old soldiers never die; they just fade away," we say: 'In California, legislative bills don't always die; they just come back with new titles.'

Such is certainly the case at least with California State Assembly Bill 1060 (AB 1060), which was first introduced by Assemblymember Hector De La Torre (D-South Gate, Southern California) in the summer of 2008 as AB 523.

AB 1060, the bill formerly known as AB 523, is back - and it's been passed by the California State Assembly and is headed to the State Senate for debate. AB 1060 could get its first hearing on the Senate floor as early as Wednesday, according to De La Torre, it's author.

If passed by the California State Senate and signed by the Governor, AB 1060 will ban the sale of alcoholic beverages at self-service checkout counters in the Golden State's grocery markets, along with in any other format retail store offering adult beverages for sale.

The argument behind AB 1060 is that banning the sale of alcoholic beverages at self-service checkouts will help prevent the sale of liquor to minors. "We need to do everything we can to prevent alcohol abuse by minors," says Assemblymember De La Torre. "AB 1060 will ensure that all alcohol purchases are made through a face-to-face transaction with a cashier who can check proper identification - we currently require it for cigarettes, spray paints, and some over the counter drugs.

De La Torre has a fairly strong argument from a legal precedent perspective for AB 1060. As he mentions in the above quote, it's illegal for retail stores in California to sell cigarettes, spray paints and certain over the counter drugs like cold medicines containing Pseudoephedrine, which is used to make Methamphetamine, via self-service checkout. Instead, the products can only be sold to customers face-to-face by a clerk at a full-service checkout lane.

We first wrote about the legislation, then known as AB 523, in this July 14, 2008 piece: Breaking News & Analysis: CA Assemblyman Introduces 'Tesco Fresh & Easy Law' to Ban Stores With Self-Checkout-Only From Selling Alcoholic Beverages.

In the story we called the bill - which is now AB 1060 - the "Tesco Fresh & Easy Law," not because the legislation was authored to directly target Tesco's Fresh & Easy Neighborhood Market, but rather because if passed it will require the fresh food and grocery chain to change the policy in its 98 California stores from self-service checkout only to having at least one full-service checkout lane, since AB 1060 requires all purchases of alcoholic beverages to be handled face-to-face by a store clerk at checkout.

The legislation if passed would have little if any affect on the state's other grocer's, since virtually every chain and independent in California that offers self-service checkout also offers the option of full-service as well in-store. Therefore, the "Tesco Fresh & Easy Law" coinage has a certain reality to it in that Fresh & Easy Neighborhood Market would be the only major grocery chain in California forced to make a serious operational policy change as a result of the law.

Tesco's Fresh & Easy offers what it calls "assisted self-service checkout" in its 159 stores located in California, Nevada and Arizona, by which it means customers scan and bag their own grocery purchases but can ask a clerk stationed at the front-end of the store for assistance if desired or needed.

AB 523, essentially the same bill as the current AB 1060, wasn't passed in the 2008 State Assembly session. De La Torre reintroduced the legislation about a year ago as AB 1060. The bill has sat in committee until recently, when the Assemblyman and his supporters breathed new life into the legislation, in large part based on two recent studies.

The studies

On August 4, 2010, De La Torre and representatives from San Diego State University’s Center for Alcohol and Drug Studies and San Diego's Metro United Methodist Urban Ministry held a press conference in Sacramento to release findings from two recent studies done by the groups regarding the selling of alcoholic beverages through self-checkout systems used at grocery stores.

The point of the studies was to determine how easy it might be for minors (under 21-years of age in California) to purchase alcoholic beverages using the self-service checkouts in grocery stores.

In the San Diego State University study, researchers sent participants into 216 grocery stores with self-checkout machines in five Southern California counties with the charge to attempt to defeat the safeguards built into the self-checkout machines which are supposed to prevent minors from being able to purchase alcoholic beverages using the self checkouts.

In about one out of every 10 instances, the self-checkout machine failed to lock up when alcohol was scanned so the purchaser could complete the transaction without any intervention from an employee, according to Dr. John Clapp, director of the University's Center for Alcohol and Drug Studies.

In addition to the machines not locking up, the study found that in 8.4% of purchase attempts through a self-checkout machine, study participants/shoppers were not asked to show their identification. Participants were aged 21-23, and were independently judged by a panel to be 23 years old or under, Clapp says.

California law requires self-service checkout machines to lock up whenever an alcoholic beverage item is self-scanned by a customer so the shoppers age can be verified. That's the safeguard the participants were instructed to see if they could defeat.

Clapp draws the following conclusion from the study: "Consistent with the recommendation of the U.S. Surgeon General, preventing underage drinking requires a zero tolerance policy for any system that potentially allows a minor or intoxicated person to purchase alcohol. Our study clearly showed that the self-checkout system has several vulnerabilities and could be a potential source for the illicit sale of alcohol to minors."

In the second study, conducted by the Youth Council at Metro United Methodist Urban Ministry in San Diego, a group of participants ages 21-23 were sent into 29 grocery stores in San Diego County with self-checkout machines and told to try to "game" the self-checkout systems, according to John Hughes, the executive director of the ministry group. Gaming the system in this case means being able to scan and purchase an alcoholic beverage item without the self-checkout machine locking up, as is required by California law.

The participants were able to successfully game the system 69% of the time, Hughes says. He says the study participants were able to fool the self-checkout system by scanning an item of equal weight, such as soda pop, and then bagging an alcoholic item. A variety of different items were used that easily worked to purchase alcohol undetected. All alcohol was paid for and all of the young adults who participated in the community assessment were over 21 and of legal age to purchase alcohol, according to Hughes.

Supporters

The two studies, along with key support from MADD (Mother's Against Drunk Driving), has fast-tracked the once languishing AB 1060.

"MADD believes we can help to reduce the threat of drunk drivers on our roads by stopping the sale of alcohol through self-checkout machines," says Gail Butler, MADD California State Executive Director. "MADD strongly supports AB 1060 to ensure that alcohol is sold in face-to-face transactions."

The bill has also picked up support from numerous California law enforcement officials, some who joined Assemblymember De La Torre at the August 4 press conference at the State Capital.

AB 1060 is also being supported by the United Food & Commercial Workers (UFCW) union, which represents about 1.3 million unionized grocery store employees and allied workers in the U.S. and Puerto Rico. UFCW representatives are currently lobbying legislators in Sacramento, urging them to support the legislation.

The UFCW, which counts California among its leading states in terms of union members, has been locked in a fight with Tesco for nearly three years over the union's desire to organize the grocery chain's store-level workers, as we've reported on and analyzed extensively on Fresh & Easy Buzz. [Click here to see our past stories on the issue.)

It also happens to be the case that the UFCW isn't crazy about self-service checkout in general, and particularly isn't crazy about grocers like Fresh & Easy that offer self-service only, because it reduces and eliminates the need for grocery checkers and baggers. As such, the union's support of the measure is obviously multi-layered: It supports AB 1060 because it's in favor of reducing sales of alcohol to minors, but it's also well-aware that the law would impact Tesco's Fresh & Easy directly if passed. That impact, which would as we've said require the chain to at a minimum add one full-service checkout lane in each of its stores in California, favors the UFCW's position.

AB 1060: An unintended favor to Tesco's Fresh & Easy

Ironically, in our analysis, the passage of AB 1060, which would force Fresh & Easy Neighborhood Market to operate at least one checkout in each of its California stores, would be a positive development for the grocery chain.

In this 2009 piece - March 7, 2009: Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track - we suggested seven operational changes Tesco needs to make at Fresh & Easy in order to help improve its sales and profits. Fresh & Easy has lost over half a billion dollars since it opened its first stores in November 2007.

One of those seven changes is that Fresh & Easy needs to add at least one, and more logically two, full-service checkout lanes in each of its 159 stores. (You can read our analysis in the March 7, 2009 story linked above.)

If AB 1060 becomes law, it will force Tesco to make such a change, adding at least one full-service checkout lane in its stores, which is something the grocery chain should have done long ago - and should do on its own today, in our analysis and opinion.

And although Tesco has yet to take our advice on this matter, it has recently taken one of Fresh & Easy Buzz's seven retail operations changes into account. In that same March 2009 piece our first of the seven suggestions was that Fresh & Easy Neighborhood Market accept WIC Vouchers in its stores. Last month Tesco began accepting WIC at its Central and Adams Fresh & Easy store in South Los Angeles and has additional stores slated to begin accepting the vouchers soon. [See - July 30, 2010: Fresh & Easy Neighborhood Market Store at Central & Adams in South Los Angeles is Now Accepting WIC Vouchers; Additional Stores to Follow]

Unintended consequences

We don't think having state legislators make retail operations policy for grocers is the greatest idea. But, ironically, if AB 1060 passes, leading to Fresh & Easy Neighborhood Market's creating at least one dedicated full-service checkout lane in each of its California stores, the term the "Tesco Fresh & Easy Law" will probably end up meaning the State of California passed a law, AB 1060, which actually forced Tesco to make a change - adding the full-service checkout lanes - that resulted in more satisfied customers and an increase in business at the 98 California Fresh & Easy stores.