The pandemic-driven surge in grocery prices has, somewhat surprisingly, become a major issue in the presidential campaign. Both of the major candidates have proposed versions of price controls to moderate or rollback the prices Americans pay for food. Leaving aside the fact that price controls historically don’t work and cause economic havoc in the process, there’s a better way to cut costs by improving efficiencies.

As the Wall Street Journal reported earlier this week, the Save A Lot chain is experimenting in Brooklyn with an automated shopping system that could end up reducing the relentless rise in food prices. The discount grocery chain has teamed up with a Tel Aviv-based company, Fabric, to launch an innovative micro-fulfillment that could reduce grocery costs by 30 percent while delivering orders in under 30 minutes.

In the 4,000-square-foot pilot warehouse, a robot-powered system allows for a 50-item grocery order to be completed in just six to eight minutes. Robotic arms retrieve plastic bins from 25-foot-high shelves, which are then delivered to robots on the ground. The robots transport these bins to workers who simultaneously bag multiple orders before handing them off to Uber drivers for delivery. Curt Avallone, Co-CEO of Fabric, credits the efficiency of robotic operations in reducing labor and warehousing costs.

Save A Lot plans to open additional robotic-powered fulfillment centers in New York City and Dallas. The cost-effectiveness of this model is evident; the micro-fulfillment center was built for $1 million in just four months, compared to the millions of dollars and two years typically required for a traditional grocery store. Plant and equipment expenditures are offset through labor savings. Depending on store size, grocery outlets employ, on average, between 10 and 300 workers; Save A Lot’s center employs 10 people working across two shifts.

Of course, this kind of radical improvement in efficiency raises alarms for some. Labor unions such as the United Food and Commercial Workers International Union are worried about job losses, echoing the concerns of Longshore workers that resulted in a three-day work strike last week. 

The potential costs of automation are always evident, while its benefits are often indirect and widely dispersed as they raise productivity and incomes across the economy. As I noted earlier this week, the “transition costs” some workers experience are real and should be mitigated through public policy that fosters income stability and retraining. With the right mix of support and incentives, everyone can benefit from technological improvements to work. 

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