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sr-102379-6tCA RLK:5SS:msh Council Meetir-~ 10-23-79 STAFr^ REPORT TO: Mayor and City Council FROM: City Attorney SUBJECT: Proposed Item Pricing Ordinance OCT 2 3 1979' INTRODUCTION This report transmits a recommendation that the Council direct the City Attorney to prepare an ordinance requiring items to be individually priced in retail stores, and to schedule a public hearing. BACKGROUND State law requires retail stores using automatic check-out systems to use a consumer protection system called °'item pricing", which requires readable prices in arabic numbers on packages and cans. This legislation expires in January, 1980. Senator Roberti has introduced SB 92 in the legislature, which would extend indefinitely the present law requiring item pricing. On March 27, 1979, the Council adopted Resolution Pdo. 5253, which endorsed SB 92. The Consumer.' Protection Division of this office has received numerous communications from citizens and consumer oriented groups expressing concern that a valuable consumer protection will be lost if SB 92 is not passed by the legislature. There is apparently a good chance that this will come to pass; therefore, Santa b4onica consumers will be left without this protection unless the City adopts its own item pricing ordinance. tSC oc~z~197a Santa ^"mica, California Because of the importance of_ item pricing to Santa A4onica consumers, and because of the need for a speedy decision on this issue to enable grocery stores and retailers to prepare for local item pricing, it is recommended that the Council should set a public hearing as quickly as possible. ALTERNATIVES The Council may direct the City Attorney to prepare an ordinance establishing local item pricing that is identical in all respects to the current State Item Pricing Bill, explore alternative means of item pricing, or not prepare any ordinance at all. RECON1uENDATION It is respectfully recommended that the Council direct the City Attorney to prepare an ordinance providing for local item pricing in the City of Santa *4onica, as well as exploring other alternatives, and schedule a public hearing on the matter for the November 13, 1979 Council meeting. It is suggested that local grocery chains and consumer groups be advised of this public hearing so that their comments can be incorporated in the staff report transmitting the ordinance. Prepared by: Stephen S. Stark, Assistant City Attorney Rosalind Smith, Consumer Affairs Specialist Consumer ~?unodities: pricing B & P CodE 2/14/79 As Introduced SENATE COMMITTEE ON BUSINESS & PROFESSIONS Staff Analysis of SB 92 (Roberti) S HISTORY: This measure. was introduced to permanently B extend the requirement of item pricing by food stores, first imposed by the Legislature for the 9 period April 1, 1976 - April 1, 1977 (SB 261, Rober- 2 ti, Chapter 1120, Statutes 1975). Subsequent legis- lation;including SB 32 (Roberti, Chapter 763 of 1977) which passed out of this committee, extended the item pricing requirement tc January 1, 1980. F In September 1975, HR 36 (Ralph) was introduced and I enacted, requiring the Legislative Analyst and the N Assembly Office of Research to monitor developments A in the use of computer checkout systems in Calif or- N pia, and to .report their findings in December 1976, C E BACKGROUND: The experimental testing of computerized c_e~idout ssystems which, from a grocery retailer's Y view, eliminate the necessity of marking the price E on most food items, sparked the item pricing contro- S versy. The systems utilize the Universal Product Code, to which most manufacturers already subscribe. The Code permits an .electronic "scanner" at the checkout stand to identify the item. The price of the item is programmed into the computer. Thus the scanner will.°,-ead91 the Universal Product Code, ring up the price automatically, flash the price on a screen for the consumer to see, and print out a detailed receipt to be given to the consumer at the close of the transaction (e.g., 4 Ivory soap @ .37 , 1.48T). The market's present need for a price on each item is to enable the clerk to know the price and ring it up manually. Comnu- terized checkout eliminates that need, To date, approximately 44 California supe?-maricets have installed optical scanner automated systems, A11alVSt°S RepOYt The Legislative Analyst's report indicated, among other things, that: SB 32 (Cc ~d) Page two (1) Net before-tax savings from automated scanner systems can range from 1,0 to 1.5 percent of store sales volu_*res with item price elimination, and from .75 to 1.15 percent of store sales volumes without item price elimination. (2) On a statewide basis, total estimated potential. employment reductions in retail food stores are 5,900 to 8,650 assuming item price elimination, Assuming item pricing is retained, total job reductions are 3,300 to 4,700. This loss of jobs in retail food employment may be offset, in part, by induced employment in equipment and electronics industries. PROPOSED LEGISLATION: SB 92 termination date, January 1, grocery stores utilizing aut are.reguired to item price. indefinitely the requirement price consumer connodities. removes the current 1980, until which ~matic checkout systems Therefore ~t waul extend that such stores item CO.'~ENTS: The existing statutory provision which exempts certain coamnodities (e.g., fresh produce, sale items, vending machine items, cigarettes and cigars) from item pricing requirements would remain in effect. Additionally current law also exempts con°nodities not generally item priced on January 1, 1977, as determined by the State Department of Food and Agriculture. The Department published its list in April 1478 which includes: individual containers of beer and soft drinks, candy bars, cigarettes in cartons, certain baby Toed, packaged produce and certain dairy products, POSITIONS: The Committee office has received numerous letters from individuals, most of wham favor the enactment of SB 92. The following have registered support: Women For: Los Angeles Caunty Federation of Labor, AFL-CIO California Teamsters Public Affairs Council Consumer Federation of California, Los Angeles & Orange Counties Chapter Central Labor Council, AFL-CIO, San Bernardino & Riverside Counties SB 92 (C -'j) Page three Central Labor Council, AFL-CIO, Stanislaus & Tuolumne Counties Retail Clerks Jnions, Locals 197, 770, 839,1179, 1288, 1442, 3oard of Supervisors, Sacramento County California Consumer Affairs Association California Retailers Association and the California Grocers Association are opposed to this measure. The California Chamber of Commerce is also opposed, MWenw