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    Published on: October 18, 2002

    The New York Times reports that a group of parents with children who have been made ill by exposure to E. coli bacteria, probably from tainted meat, have come to Washington this week to lobby for tougher regulations and more stringent enforcement by the government.

    Ironically, this is the same week that Pilgrim’s Pride is going through the largest meat recall in history, bringing back more than 27 million pounds of meat because of concerns about listeria.

    The group, Safe Tables Our Priority (STOP), is “asking for new rules for meat and poultry producers. They would include tough civil penalties for violations and authorizing the Agriculture Department to recall contaminated food,” the NYT writes.

    The group supports a bill called Kevin's Law, named after a two-year-old who died because of E. coli exposure. This law would authorize the department to “close meat-processing plants that regularly fail to meet government food-safety standards.”
    KC's View:
    We wrote earlier this week that activists wanting tougher enforcement, but this NYT piece put a face on it – faces, in fact, of small children made extremely ill because of food safety problems.

    It is a face that few legislators will be able to resist, nor do we think they should. When it comes to these kinds of issues, the most stringent, unforgiving enforcement probably should be the rule. We cannot imagine the pain these parents have endured.

    And maybe that’s what the industry has to do. Not think like business. But think, and feel, and act like parents.

    Published on: October 18, 2002

    Reuters reports that both Walgreen Co. and Rite Aid Corp., the first and third ranked drug store chains in the country, are being investigated by the IS Federal Trade Commission (FTC) because of their marketing and privacy policies.

    According to the Reuters story, both chains are being checked because of reports that they may have infringed “upon customer privacy when pharmaceutical firms ask them to promote particular medicines to customers.”

    However, analysts believe that the worst thing that would happen is that the chains would be asked to stop providing the data.
    KC's View:
    Our view is that violating a consumer’s privacy is almost the worst kind of crime a retailer can commit. We advise all retailers to be very careful about treading on this particular ground.

    Published on: October 18, 2002

    “Recently, we sent our qualitative team, consisting of anthropologists and sociologists, out into the field to conduct ethnographic research with parents and children in various regions throughout the United States,” writes The Hartman Groups Julie Tempert in this week’s edition of HartBeat. “Their mission was to learn about the world of children's wellness and understand how parents and children negotiate a wellness lifestyle.”

    And what did they find? “As is true with other aspects of their life, children's views on wellness are often patterned after their parents, in many cases reflecting elements of what their parents try to teach them such as ‘not eating too many sweets,’ ‘brushing my teeth everyday,’ or ‘playing outside.’

    Tempest writes that some old stereotypes still ring true. “We found that boys and girls have different awareness levels and interests in health and wellness. In our interviews, girls were much more aware and interested in talking about wellness than the boys of the same age group. Boys did not spend much time thinking or talking about wellness at all, suggesting it is clearly neither a top-of-mind issue nor a popular one to discuss. Girls focus on fruits and vegetables, exercise, meaningful relationships, and nature, whereas boys equate health with foods served at dinner, sports activities, superheroes and computer games.”
    KC's View:
    All valuable insights, especially for retailers looking to create marketing and merchandising programs for kids. And very timely, in an era of “obesity lawsuits,” school districts outlawing the sales of soft drinks on school property, and national concerns about the eating habits of the nation’s youth.

    You can read more by going to…

    http://www.hartman-group.com/HB/new.html

    …or by clicking on the HartBeat logo on the right hand side of the page.

    And you can find out more next week, when we feature Part Two of this series.

    Published on: October 18, 2002

    We got a lot of reaction to yesterday’s story about Kmart testing a new, gray-and-lime-green logo. We commented, “Green. The color of money? The color of envy? You decide.”

    MNB user Kristen Northrup did:

    “Don't forget nausea. All those ups and downs....”


    We also received email that addressed Kmart’s priorities. Actually, that questioned Kmart’s priorities.

    MNB user Dick Lowe wrote:

    “What a waste of money and a bad decision. The current sign is more noticeable. Their problem is the interior decor of the stores. Gray and red! That is where the change needs to be made.”

    MNB user Jack Ericsson wrote:

    “Unless Kmart fixes what's wrong inside the store- out of stocks, dirty, cases of product on the floors-, the next signs to go up will be Going Out of Business- 50% off! Everything Must Go.”

    MNB user Dave Wiles agreed:

    “I see that Upper-Management hasn't changed their spots.

    “If something is wrong, (out of stocks, poor training, employee heavy turnover and yes, poor sells), then we must change the LOGO!

    “When expenses out-perform the income, why look to spend money where it will solve the problem. NO! Not Kmart, Spend more money on a Logo Change!

    Stupid!, Stupid!, Stupid! But that's Kmart.”


    MNB user Jane Larson wrote:

    “Isn't this logo change just lipstick on the pig? Gray and green are the colors of the faces of consumers who are sickened by yet another feeble ploy to resuscitate this dead horse. I know, why don't they try a cool logo, something like a big red and white bull's-eye...

    “Oops. Never mind. Been done.”


    And another member of the MNB community wrote:

    “I keep stopping by the local Kmart but find little has changed. The customer service stinks and the presentation of the store is always a mess. A new sign is not going to resolve the problems they are experiencing. I am looking forward to their bankruptcy sale.”

    Yikes, And you folks think we’re cynical…




    We posted a story yesterday about Wal-Mart Mexico (Walmex) abandoning ANTAD, a Mexican trade group, because of a competitive controversy. MNB user Bob Thomas, who writes a terrific website at www.internationalf1.com, provided some perspective:

    The Walmex decision to leave ANTAD (the largest Mexican retail association) is once again Walmex showing the Mexican businesses that it will not accept practices that are against the best interests of the customers of Walmex.

    “The ANTAD board adopted a policy that competitive pricing advertising or promotion could not be used by its members. Walmex withdrew from ANTAD stating that, under Mexican law, it is legal to use competitive pricing. Walmex for years has made available to its customers prices charged by Walmex and its competitors. The implication is that ANTAD is trying to stifle competition amongst its members as well as violate the Mexican laws on competition (of which Walmex recently was charged with violating).

    “More importantly, the decision by Walmex is breaking up the ‘old boys network’ in Mexico where businessmen get together and agree to anti-competitive measures hurting the consumer and benefiting them. It is good PR for Walmex and, in Mexico, pointed out the weakness of ANTAD without Walmex. My bet is that the ANTAD board will reconcile and change their mind.”





    Regarding on our series of stories and emails about customers providing their own bags instead of using the plastic variety, we got the following email from MNB user Rosemary Fifield of New Hampshire’s Co-op Food Stores:

    “We do give our shoppers five cents back on every grocery-sized bag they supply; the number of bags actually used is entered into the register by the cashier and the value subtracted from the transaction before totaling.

    “Being a Co-op, we may have more environmentally conscious shoppers, but the program seems to have a positive effect on bag reuse, both paper and plastic. We also offer a higher-quality plastic bag to make reuse possible (not the crinkly type), and periodic reminders to shoppers about the need to reuse as much as possible before recycling. Then, we collect them for recycling through our distributor. Collecting enough plastic bags to ship to a recycling plant is the biggest hang-up. If more stores were willing to work together to accept bags for recycling, it would be easier to accomplish this on a regional basis. (There is also the sorting issue; you can't mix different types of bags.)

    “We sell canvas and net bags in our stores, and the canvas bag with our logo is good advertising. But as mentioned before, the hardest part is remembering to bring your bags along. One of the best ideas I have seen is a cotton bag that folded up small enough to fit into a man's back pocket. Unfortunately, the customer who showed it to me had no idea where it had come from and I have yet to find a supplier. It's also possible to purchase fabric bags made from recycled soft drink bottles, for the truly environmentally conscious.”





    We posted an email the other day from someone complaining that supermarkets don’t provide enough information to their customers in the form of books, videos, CDs, etc… We then received email contesting that conclusion:

    One MNB user wrote:

    “You're right. Most large grocery retailers aren't utilizing information to help sell healthy foods and products, and that is sad. But the seas are changing. Healthnotes (is a company) that creates information on healthy living -- covering health concerns, nutrition, and recipes for special diets – and sells it to retailers worldwide. It's the smaller retailers, like the independent health food and grocery stores, that have been taking advantage of this information resource, available as Web content and for in-store touchscreen kiosks (with all of the information printable so shoppers can take it home). They usually locate it near books and other resources that shoppers can purchase and take home to research more.

    “But…more and more larger retailers (are) hopping on the bandwagon, including the likes of Kroger, Wild Oats, and Whole Foods. It's hard for the larger retailers to see the value in just providing information resources, as there isn't a direct monetary return. However, like this MNB user noted, providing information will help consumers better understand the value and thus purchase more healthy foods (which tend to carry a higher margin).”





    Another email on the subject of irradiation suggested that what is necessary to really make it work is a change of name, like the Reagan Administration did when it dubbed missiles “peacekeepers.” We argued with that, saying that we think it reflects a more mature shopper when actual names like “irradiation” are used and accepted. We also said that for us, missiles always are “tools of destruction,” no matter what they’re called.

    Which prompted an email from one MNB user:

    “’...tools of destruction...’ Hooo, boy! I'll bet you used to put daisies in the barrels of Army rifles back in the Sixties. Just remember when you hear an Air Force jet screeching across the sky, that's the sound of freedom.”

    First of all, it was the Seventies. We’re not that old.

    Second of all, back then we thought there was no such thing as a just war. Maturity and current events have cured us of that delusion.

    Third of all, while we would agree with you about the sound of an Air Force jet being the sound of freedom, we’re just old-fashioned enough to point out that when people protest the use of that jet, it also is the sound of freedom.

    That’s the thing about freedom. It has a lot of different sounds and shapes and colors.

    So….Peace.

    And have a great weekend. We’ll see you Monday.
    KC's View:

    Published on: October 18, 2002

    In lieu of a party for our upcoming one-year anniversary, which would be difficult to pull off since MNB has thousands of subscribers from all over the world, we’re going to have a contest.

    Every time you submit via email the names, companies and email addresses of five people to get the MNB Wake Up Call (we’re going to trust you that you’ve checked with them on this), we’ll put your name in a hat. You can enter as often as you like, as long as you keep coming up with five different people.

    The contest ends on our anniversary, November 19, at which time we will pull the names and distribute the prizes…

    • The first 15 names to be pulled out of the hat will receive brand new, totally cool, “be-the-first-one-on-your-block-to-own-one” MorningNewsBeat.com t-shirts. Wear ‘em jogging, or to the gym, or wherever you want. These are very nifty.


    • The next 10 names to be pulled out of the hat will be the recipients of equally cool, totally awesome MorningNewsBeat.com baseball caps…just like the kind we wear here at MNB world headquarters.


    • And finally, the grand prize winner will receive a t-shirt, a baseball cap – and a $50 gift certificate to Amazon.com!


    So, enter early and often…

    And tell your friends about MorningNewsBeat.com, where we respect your time and your intelligence…
    KC's View:

    Published on: October 18, 2002


    • Spartan Stores, Inc. reported that consolidated net sales for fiscal 2003's 12-week second quarter decreased 5.3 percent to $796.7 million from $841.1 million in last year's second quarter. The overall sales decline was due to difficult economic and competitive climates, the under performance of the company's existing marketing program, and the closing of 10 stores that took place during the second quarter. The sales decline was partially offset by an improvement in the company's convenience store distribution segment sales.

      Second-quarter retail sales declined 7.1 percent, with same-store sales declining 5.2 percent for the quarter; a sequential improvement over the adjusted (excluding the effect of an early Easter) 6.7 percent decline reported in the first quarter.

    KC's View:

    Published on: October 18, 2002


    • The Penn Traffic Company has hired Mike Broomfield, the former COO of Giant Foods, as its Senior Vice President of Retail Stores, responsible for the operations and financial results of all 216 Penn Traffic supermarkets in Ohio, West Virginia, Pennsylvania, upstate New York, Vermont and New Hampshire.

      "Mike Broomfield brings more than 35 years of retail food experience and a proven track record to Penn Traffic," said Joseph V. Fisher, President and CEO of Penn Traffic. "His expertise will help us implement our long-term business strategies, which include enhancing merchandising and improving operations at all of our supermarkets. We are confident that Mike will make a major contribution to our company in this newly-created position."

    KC's View:

    Published on: October 18, 2002

    The Associated Press reports that the Ivory baby, which was seen in advertising for Ivory Soap as far back as 1887 and then was phased out of Procter & Gamble’s advertising three decades ago, is coming back.

    The company is holding a national search for a new Ivory baby, with the prize a $50,000 college scholarship and being signed to appear in ads for a year.
    KC's View:
    The news stories have been saying that P&G stopped using the Ivory baby when it decided to target a broader demographic for Ivory Soap.

    But our vague recollection is that P&G got caught in a bit of a controversy 30 years ago when it was revealed that the mom holding the Ivory baby on millions of packages actually was Marilyn Chambers, a pornographic film star known for such classics as “Behind The Green Door.” (P&G didn’t know anything about that, and instantly pulled the boxes off store shelves, if we recall correctly.)

    One suspects that the company will be doing a thorough background search on any new candidates…

    Published on: October 18, 2002

    The Christian Science Monitor reports that in Germany, where Wal-Mart has been largely unsuccessful competing with the likes of Aldi and other local businesses, the biggest problem isn’t price or location or product selection.

    It’s culture.

    Germans don’t like one-stop shopping. They want cheap prices, but they don’t give a hoot if the cashier smiles at them.

    “I don't think that Wal-Mart did their homework as well as they should have," Steve Gotham, a retail analyst with Verdict Retail Consulting in London, told the Monitor. "Germany is Europe's most price-sensitive market. Wal-Mart underestimated the competition, the culture, the legislative environment."
    KC's View:
    So, essentially, Wal-Mart should have been more Teutonic. Instead, Germany is turning out to be Wal-Mart’s Titanic.

    But we suspect that in addition to Germany being a valuable learning experience for the company (and we all know you learn more from mistakes than successes), it’ll be a country that eventually will come around to Wal-Mart’s appeal, especially as the Bentonville behemoth adapts to the German mindset.

    Published on: October 18, 2002

    Back in 1993, the US Food and Drug Administration (FDA) ruled that bread could not be called “fresh” because of certain preservatives, and instead could only be referred to as “freshly baked.”

    Now, a decade later, the FDA is saying that it had been misreading the rules. Bread and other baked goods can be “fresh” after all.
    KC's View:
    If government can't get the bread baking rules right, you have to wonder how it’s doing on the big stuff.

    Published on: October 18, 2002

    Representatives of the nation’s fast food industry reportedly met with US Secretary of Health and Human Services Tommy Thompson and Secretary of Agriculture Ann Veneman and were urged to offer more healthy options to their customers along the lines of a list of 50 suggestions made by the produce for Better Health Foundation. Similar meetings are in the works between federal officials and the soft drink business and other segments of the food business.
    KC's View:

    Published on: October 18, 2002

    Local press reports say that A&P has instituted a moratorium on new hires and a salary freeze for all non-union positions that is slated to last until next February.

    CEO Christian Haub reportedly instituted the freezes to keep costs down and focus attention on building short-term core business results.
    KC's View: