Grocer rings up savings with Linux cash registers

Von Thomas Hoffman

Hannaford Brothers Co. has already received productivity and cost-avoidance windfalls from an ongoing point-of-sale system replacement project that will cost between US$10 million and $20 million, executives at the grocer said last week.

The new Linux-based POS systems have been installed in about two-thirds of the company"s 140-plus supermarkets in New England and New York. Hannaford Bros., a division of Brussels-based Delhaize Group, expects to complete the implementation of the thin-client systems by October, said CIO Bill Homa. The systems, which are supported by 12 vendors of servers, software, printers and other peripheral devices, replace 15-year-old Fujitsu Ltd. technology based on OS/2 Version 1.3, according to Homa.

The Fujitsu software is "solid as a rock," said Homa. But it has limitations because it can run only as fast as a 166-MHz Pentium processor, he said. That plus Fujitsu"s decision to halt support for the OS/2-based POS system prompted the grocery chain to launch a replacement strategy in 2001.

Vendor support push

As part of the move to a thin-client architecture, Homa and his team hope to eventually run all 40 store applications, such as its pharmacy and video-rental systems, on a single Linux server. Right now, those applications run on a mix of mainframe, Unix and Windows servers with links to the Linux terminals installed in the stores.

One of the constraints of the server plan, said Homa, is that Hannaford must convince its retail systems vendors, such as PDX Inc., a Fort Worth-based maker of pharmacy software, to port applications to Linux.

When Hannaford first began evaluating POS systems, "we kind of backed into Linux," Homa said. The open-source operating system ended up being the best fit for the company"s intelligent POS terminal requirements.

Hannaford executives decided upfront that in checkout lanes they wanted to use so-called intelligent terminals that don"t require any moving parts and don"t need cooling fans. After evaluating various technologies, the grocer opted for POS terminals from Wincor Nixdorf Inc. that can run either Linux or Windows and POS software from Retalix Ltd. that runs on Windows servers. Homa said the terminals can continue running if servers go down.

Other retailers have deployed Linux-based POS systems, although adoption is still extremely limited, according to analysts. In August, Circuit City Stores Inc. announced plans to migrate to IBM SurePOS 300 cash registers running Linux at its 600 stores.

At least one consultant expects the Hannaford project to be the forerunner of a boom in POS system replacement projects among retailers this year. "For years, we"ve been hearing that retailers were going to swap out their POS systems. This year they"re doing it," said Cathy Hotka, principal at Cathy Hotka & Associates, a retail IT consultancy in Washington.

Although retailers" existing POS systems are reliable and have long been completely paid for, today"s systems are easy to learn to use, offer new features and are able to integrate with systems that support retailers" customer data mining initiatives such as loyalty/rewards programs, Hotka said.

Homa said it takes just two hours to train a cashier to use Hannaford"s new Retalix POS software, half the time it took for the Fujitsu system. Plus, he said, cashiers using the Retalix system can tender money 20 percent faster than they could with the previous system.

"We"ve been able to reduce a significant amount of training time with a simpler, user-friendly interface instead of cashiers having to memorize product codes," said Natasha Velasquez, Hannaford"s store-line POS support manager, who is overseeing the implementation of the POS terminals at the remaining 55 stores.

The thin-client Linux architecture has delivered other benefits. Homa estimates that it would have been 25 percent to 30 percent more expensive for Hannaford to purchase, install and support a POS system that was based on Windows or another non-open-source platform.