Change at the Checkout: Tracing the Impact of a Process Innovation

Barcode scanners, introduced in the early 1970's, were a foundational process innovation in the grocery supply chain. By 1984 scanners had been installed in 10% of food stores in the U.S. Fixed‐effect analysis of city‐level price data shows that scanners reduced prices of groceries by at least 1.4% in their first decade. The results are consistent with prior estimates of labor saving by scanners. Early adopters and adopters in states that imposed fewer restrictions on complementary process innovations contributed disproportionately to the price decreases.