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    Published on: February 11, 2004

    Good coverage over on SupermarketGuru.com of the reports that the late Dr. Robert Atkins, who popularized the low-carbohydrate, meat-egg-and-cheese diet, was 258 pounds and had a history of heart disease when he died last April at age 72 after hurting himself in a fall on an icy street.

    "Atkins was six feet tall; weighing 258 pounds would have made him technically obese, according to standards set by the US Centers for Disease Control and Prevention (CDC)," SG writes. "According to reports, Atkins had suffered a previous heart attack, congestive heart failure and hypertension, all conditions that are related to obesity."

    Stuart Trager, chairman of the Atkins Physicians Council in New York, told the Wall Street Journal that Atkins' heart disease stemmed from cardiomyopathy, a condition that is believed to result from a viral infection. And when Atkins released a statement in 2002 saying he was recovering from cardiac arrest, he said it was due to a heart infection that was "in no way related to diet."

    Now, these reports continue to be the source of some controversy. In fact, USA Today reports this morning that, in fact, Atkins wasn't obese - that he 195 when admitted to the hospital after a fall on April 8, 2003, and that his weight ballooned to 258 in the hospital because of fluid retention from organ failure.

    He went into a coma and died April 17 at age 72.
    KC's View:
    Can we all just calm down?

    First of all, keep in mind that this is largely a political discussion, fueled by the radical vegetarian agenda pursued by the Physicians Committee for Responsible Medicine, which released the information to the WSJ to begin with.

    And it is an issue made even more political by low-carb's sheer pervasiveness. According to the NPD Group, about 10 million Americans, or 3.5 percent of the population, currently are on a low-carb diet. However, it is estimated that as many as 40 million Americans have tried Atkins, the South Beach diet, or one of its low-carb brethren - even though there remain some medical questions about the long-term health impact of a low-carb regimen.

    Whether or not Atkins' death was related to his physical condition, if it is confirmed by authorities that he had weight issues and heart problems, it is hard to imagine that it won't have some sort of impact on low-carb mania. Americans, in matters like these, often are like lemmings…they attach themselves to programs and initiatives - especially those that offer quick fixes - until an alternative comes up, and then they switch directions and never look back, no matter what cliff they may be walking off.

    No matter how much Atkins' supporters and even his widow protest, it may not matter much. They may be protecting his legacy, but they also will be perceived as protecting a multi-million dollar empire.

    As SG.com fairly points out, Atkins' heart and weight problems may not have had any relationship to his death - though it would seem logical that one should question the wisdom of eating steaks and bacon if one has heart disease, no matter what precipitated the condition.

    These issues are all so ephemeral and, in some ways, illusory. After all, think of great athletes like Jim Fixx and Hank Gathers and Pete Maravich who would have appeared to be in terrific health, and who died relatively young of heart-related ailments.

    All we can do is our best. And "best" probably means "balanced" - as in a diverse, nutritious diet combined with frequent and vigorous exercise.

    By the way, we've been pleased to have been asked by the Food Marketing Institute to moderate a three-hour Learning Lab session at its May show entitled The Obesity Opportunity: Shrinking Waistlines, Building Bottom Lines.

    There may be no more pressing health issue facing the marketplace than the obesity epidemic - not just in the United States, but throughout the world.

    The ever-expanding waistlines of adults and children create long-term health implications, and offer an enormous number of marketing and sales opportunities for the savvy and aggressive food retailer. This in-depth examination of "the obesity opportunity" will frame the issues in way that will help retailers and manufacturers understand how to connect with different shoppers over this issue, develop strategies that capitalize on the issue, and give stores a differential advantage in the eyes of consumers. And, exciting new research from both Rodale Press and The Hartman Group will be presented.

    If you want to know more, stay tuned…

    Published on: February 11, 2004

    One in a series of previews of the upcoming FMI MarkeTechnics Show…

    Although most Radio Frequency Identification (RFID) applications are in the pilot stage, there are steps that organizations can take now to prepare. In a session scheduled for the Food Marketing Institute (FMI) MarkeTechnics Show in San Francisco later this month, Kathryn Cullen, a principal with Kurt Salmon Associates, will discuss what systems and processes should be in place, which team members and disciplines will be impacted and what technologies and equipment will be required.

    In this exclusive e-interview, MNB asked Cullen about how organizations should position themselves for the RFID revolution.

    MNB: Okay, let's assume that we're a small or medium-sized retailer with a modest IT budget. What's the first thing we need to do in order to get up to speed on RFID?

    Kathryn Cullen: While it may be premature for a mid-size retailer to move to an RFID pilot right now, they should plan for RFID by forming and involving cross-functional teams. RFID touches most functions, from product development to returns. Working with a larger, diverse group, including DC, merchandising, and accounting associates, will help identify potential applications and required changes. This group needs to identify sources of business value by aligning RFID initiatives with current business objectives and strategic goals. They also need to establish metrics to justify the business value RFID will bring to the organization. And finally, they need to focus on the consumer - ensure consumer benefits and concerns are a focal point in the RFID evaluations and plans.

    MNB: Is it absolutely essential that we do this? Are we risking irrelevance and a huge competitive disadvantage if we don't?
    Kathryn Cullen: I think it is imperative that we do this, we consider this evolution to RFID as a significant technology breakthrough, as important as the development of the bar code in the early 50's. While it took industry over 10 years to adopt the bar code, we think it will take 5+ years for the same to happen with RFID/ePC. But if the adoption rate is greater, it can move faster. And this technology requires planning and significant dollar investment, so we are urging organizations to start that planning process now.

    MNB: In your mind, what sorts of things are we spending money on know that we should stop spending on so that we can apply sufficient budget to RFID?

    Kathryn Cullen: This is a difficult question. Because of the slow economy of the past few years, many retailers have been minimizing their IT investments and are now dealing with their organization's unmet needs from the past few years. Hence they are focused on POS upgrades, ERP installations, consolidating systems caused by mergers & acquisitions. All of which are activities that clearly need to take place. One area to consider minimizing investment is in current EDI processing and bar code technology. Where these tools have not already been implemented, consider 'leaping' over them and going directly to establishing Internet portals for suppliers to access data and conducting RFID pilots to receive and transport product.

    MNB: Is RFID mostly a backroom issue? How will consumers see the impact or advantages?

    Kathryn Cullen: RFID is initially a backroom effort but we expect consumers to see an impact, even before RFID reaches the item level and enables 'smart shelves'. The most obvious impact is in product availability, by better product tracking, even at the pallet and case level, retailers will be able to identify not only that they have product to sell, but more importantly, where it is. So out of stocks and lost sales should decrease.

    MNB: There are those who think that RFID is Wal-Mart's master plan for bankrupting every other retailer so it can achieve its plan of world domination. Obviously, that's overstatement...but how do you address this issue with retailers who simply cannot make the commitment?

    Kathryn Cullen: Wal-Mart is just responding to consumer demand for better product selection and availability. They have continued to push their supply chain operations for greater efficiencies and speed and in so doing have recognized the value that RFID technology can provide in product tracking. The reality is that when this technology is fully implemented and consumers see fewer empty shelves and a product assortment that meets their tastes and needs at a reasonable cost, they will expect the same level of service from all retailers. If a retailer chooses not to adapt to this changing situation, they will need to determine some other mechanism to differentiate themselves to the consumer, e.g. increased level of service, unique products, etc.

    The RFID session is scheduled for Monday, March 1, from 10:30 – 11:30 am, at FMI's MarketTechnics Show in San Francisco.

    You can learn more by going to:


    http://www.fmi.org
    KC's View:

    Published on: February 11, 2004

    The Los Angeles Times reports that into the cauldron of debate about the reimportation of low-cost prescription medicines from Canada comes a different sort of pharmaceutical problem - counterfeit drugs, which is an issue the extent of which authorities say they cannot estimate, and that is causing countless human suffering and financial harm

    The paper cites numerous cases in which the treatment of seriously ill individuals has been compromised either by counterfeit medicines in which high-dose medicines have been surreptitiously replaced with low-doses, or in which medicines have been replaced by a fake.

    "The Food and Drug Administration insists that the country's pharmaceutical drug supply is the safest in the world," the LAT writes, "But a growing number of counterfeit drug seizures and arrests has raised new worries that consumers can't be so sure the pharmaceutical medicines they buy are safe or even genuine." These aren't drugs off the street, but those acquired from major drug store chains, which got them - they thought - from major pharmaceutical companies. The legal and financial implications for these companies are enormous.

    Among the anti-counterfeiting measure being considered:

      • "Pedigree laws" that would require written documentation every time a drug changes hands.

      • Tamper-proof packaging, special watermarks and holograms that are difficult for criminals to duplicate.

      • Radio-frequency identification (RFID) tags, which would track products as they move through the distribution system.
    KC's View:
    We would hate it if authorities, under pressure from major drug companies, used the very real counterfeit drug problem as an excuse not to deal with the issue of prescription drugs being so much less expensive in Canada. There would seem to be both systemic and philosophical problems that have to be worked out here - but reimportation strikes us as a very different issue than counterfeiting.

    Published on: February 11, 2004

    A California assemblyman has introduced a bill that would prevent people from filing lawsuits that would hold fast food chains and food manufacturers accountable for people's obesity issues.

    "We're responsible for our own eating habits," John Dutra told Reuters in an interview. "The manufacturer that provides us with ice cream or cake or pies or cookies shouldn't be responsible for us eating their products in excess."

    MNB recently reported that two similar bills protecting food and beverage companies from "obesity lawsuits" are working their way through the Ohio state legislature.

    "It just seems so ridiculous to me for the restaurant and the food manufacturers to face the potential litigation when the litigation was so frivolous," Dutra said.
    KC's View:
    One more time…just because a lawsuit doesn't have merit doesn’t make it frivolous. (And, conversely, just because a lawsuit as merit doesn't mean it isn’t frivolous.) If fast food retailers and manufacturers shouldn’t be held responsible for the products they sell and their impact on the nation's obesity epidemic, then let the courts decide that.

    If similar bills had prevented tobacco companies from being sued decades ago, we wouldn’t know as much today as we know about the deceptions perpetrated by the tobacco companies to addict so many people to their products and, eventually, kill them.

    It isn't an apples-to-apples comparison, certainly. But we get nervous whenever issues that have to do with justice get legislated away from the judicial system.

    Published on: February 11, 2004

    The Detroit News has an interesting piece about the most recent round of layoffs at Grand Rapids-based Meijer - 1,900 management jobs that "was the largest work force reduction in Meijer's 70-year history and the kind of brutal corporate downsizing some employees thought would never happen at the family-owned company."

    The paper notes that while Meijer used to be the kind of store that kept its doors closed on Sundays, these days it cannot afford "to hew to its paternalistic roots" - and it makes no apologies for the new approach.

    "There's a reason why (the 1,900 managers) were let go," spokesman John Zimmerman tells the News. "They didn't fit into our strategy of growth moving forward." And, he says, they represented a layer of management personnel that didn’t fit into a retailing world dominated by the Nation of Wal-Mart. (Our phrase, not his.)

    "It's a fierce marketplace," Zimmerman says. "We have to provide guests with what they want, when they want (it), or they will go somewhere else."
    KC's View:
    We agree with this last sentiment completely.

    What's interesting is that Meijer believes that to succeed long-term, it has "to connect emotionally with customers rather than lure them with rock-bottom prices."

    You have to wonder, though, if the company risks the emotional connection when it diverges from the "paternalistic roots" that gave it an identity to begin with. That's probably easier said than done - and Meijer probably has to find new ways to communicate how it identifies with and advocates for its shoppers.

    That's not to say it can't be done. It can. And Meijer is working hard to do it with new stores and a newly aggressive attitude. But we have this vague feeling that something is being lost in the translation.

    Published on: February 11, 2004

    Rite Aid Corp. reportedly has offered up to $4 billion in cash and stock to acquire the Eckerd drugstore chain from JC Penney.

    Two other bids have been submitted, one by CVS and Kohlberg Kravis Roberts (KKR), and the other by Jean Coutu - both of which reportedly were in the $4 billion range.
    KC's View:

    Published on: February 11, 2004

    Published reports say that federal officials have ordered the quarantine of 80 farms and the slaughter of 72,000 chickens - a response to growing concerns about the spread of bird flu.

    This second case of bird flu was found in a commercial flock of chickens in northern Sussex County, at least five miles away from the farm where the first flock tested positive last week; however, it is believed that the second flock may have been infected by the first.

    As of now, all sales of live poultry in Delaware have been canceled. However, no recalls have been ordered.

    Seven nations have banned at least some poultry imports from the United States because of the bird flu cases. US poultry exports represent a $1.7 billion business.
    KC's View:

    Published on: February 11, 2004


    • NamNews reports that Ahold is nearing completion of the sale of its Brazilian assets - Bompreco and much of G.Barbosa - to Wal-Mart. However, analysts say that regulatory issues may force the company to sell only Bompreco to Wal-Mart, and sell the rest of its holdings to a local concern.


    • Kansas City-based Associated Wholesale Grocers announced at the annual National Grocers Association (NGA) convention that it is expanding its dollar-store-style product selection by 300 to more than 860 SKUs. The company expects the segment to generate $16 million in sales this year.


    • C&S Wholesale Grocers announced that it will close two warehouses that it acquired from Supervalu last year, in Cranston, R.I., and in Andover, Mass.


    • Hershey Foods has signed a deal with Dr. Barry Sears and will introduce a line of nutrition bars based on Sears' Zone Diet during the third quarter of this year.

    KC's View:
    Now, as long as Sears doesn't die of congestive heart failure, it'll all work out okay…

    Published on: February 11, 2004


    • Stater Bros. continued to benefit from the Southern California grocery strike, posting record sales and earnings for its fiscal first quarter ended December 28th. Sales rose by 51% for the quarter to $1.03 billion, and net income soared to $34.6 million from $2.9 million in the year earlier period.


    • Convenience store chain 7-Eleven Inc. reported that January 2004 sales were $878.4 million, an increase of 7.6 percent over the January 2003 total of $816.0 million. Total merchandise sales for January 2004 were $583.6 million, an increase of 5.1 percent over the January 2003 total of $555.1 million. Gasoline sales for January 2004 were $294.8 million, a 13.0 percent increase compared to $260.9 million in the prior-year period.

      US same-store merchandise sales for January 2004 increased 4.8 percent, on top of a 5.9 percent increase in January 2003.


    • Coca-Cola Co. posted fourth-quarter net income of $927 million, compared with $930 million in the same period in 2002. Revenue rose to $5.18 billion from $4.8 billion.


    • Wal-Mart de Mexico (Walmex) reported fourth-quarter net profit that was the equivalent of $211 million (US), compared with $197 million (US) during the same period a year ago. Sales for the quarter were $3.3 billion, up nine percent from the same period in 2002.


    • PriceSmart, Inc., which operates warehouse club stores in Asia, the Caribbean, and Latin America, reported that January 2004 net sales decreased 5.8 percent to $45.6 million from $48.5 million a year earlier, while same-store sales were off 2.4 percent. For the five months ended January 31, 2004, net sales decreased 11.5 percent to $262.4 million from $296.6 million last year, with same-store sales off 8.7 percent.

    KC's View:

    Published on: February 11, 2004

    In a piece yesterday about the burgeoning competition between Starbucks and Dunkin' Donuts, we complimented the latter's new lattes and said we'd probably choose between the two based on which one is closer at the moment of desire.

    To which one MNB user responded:

    I disagree. I may be in the minority, but I will go out of my way to find a Starbucks. In fact I walked several blocks with my 2-month-old daughter (she was very bundled up) the other day in Chicago in February to get my Starbucks cup of coffee. Many people I know swear by Dunkin Donuts coffee, which I'll drink if absolutely necessary. (Nothing else around) However, I will only buy a small because I cannot stand to drink coffee out of a Styrofoam cup. And maybe that paper cup with the Starbucks logo is a necessity as well. They have done a tremendous job building equity in the Starbucks brand. My diversion of several blocks the other day is a perfect example of that.

    Another member of the MNB community wrote:

    I’ll make my decision based upon the fact that I can resist Starbucks pastries, but a donut....ummm, donut.... will make me want more than my coffee.

    For me, Starbucks is my choice, until they co-brand with Krispy Kreme.


    And another member of the MNB community wrote:

    I believe that coffee drinkers stay loyal to the one they like. Here in Buffalo, you do not find too many Dunkin' Donuts, due to the fact that we here have a love affair with Tim Hortons. I will go out of my way (as will many others that I know) to get to a Tim Horton's opposed to a Dunkin' Donuts. Not that their coffee is not good, but the flavor profile on the Horton's coffee is unique enough to drive (or walk the extra mile). Same thing with Starbucks - we have a local coffee shop around here with a few locations in the more eclectic sections of the city, a few years ago Starbucks announced they would be opening across the street. Many people were up in arms, saying that "Big Bad Starbucks" was coming in to put the little local guy out of business. Well, it is a few years later and the local guy is going just as strong, if not better and Starbucks has a steady flow as well - what it REALLY comes down to is the COFFEE (in my opinion at least).




    In a story yesterday about the end of the mad cow probe by the federal government, we quoted Ron De Haven, USDA's chief veterinarian, as saying: "Our investigation is now complete. We feel very confident the remaining animals, the ones we have not been able to positively identify, represent little risk."

    This prompted some responses.

    One MNB user wrote:

    That has to be the most insanely illogical statement ever made by a public official. I'm glad Ron DeHaven is feeling confident. As for me, I'm no longer eating beef!

    MNB user Denise Remark remarked:

    I've never seen a cow with it's head in the sand...oh wait, that's a USDA representative!

    Another MNB user wrote:

    How is it unscientific to test all cows for BSE? Wouldn't it be more unscientific, leaving it up to guess work (much like the remaining cows they haven't found, but consider no threat) to NOT test them all?

    If another country is already doing it, why can't we? Oh right, we don't have any money to implement such an unscientific safe guard. How much has the beef industry spent on advertising to convince the consumer their product is safe, while not doing a whole lot to insure that it is? And I wonder how much campaign money our administration is getting from the Cattlemen's Association and the like?

    I find it hard to eat beef now, not out of fear of getting BSE, but out of disgust for the practices and efforts being made to keep our food supply safe.


    And yet another MNB user chimed in:

    For a moment, when I first glanced at the article, I thought the quote was from "Ron De Haven, USDA's chief vegetarian". That's about the only way you could feel confident that the nation's beef supply posed no danger.




    Finally, in response to Eddie Basha's characterization of Wal-Mart's march on domination as an "economic holocaust," and some people's feelings that this is inappropriate rhetoric, another MNB user wrote:

    You don't have to publish this if you don't want to, but I just wanted you to know Glenn Cantor is not the only one who was offended and angered by the reference used by Ed Basha. It shows a complete insensitivity and lack of understanding on his part. One thing I could tell you is that if I lived in that market I would consider not shopping at his stores. Unfortunately he is not the first person who does not understand why Nazi references are inappropriate, and won't be the last.
    KC's View: