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    Published on: February 12, 2004

    The Los Angeles Times reports this morning that negotiations between the United Food and Commercial Workers (UFCW) union and representatives of the region's three major supermarket chains (Kroger's Ralphs, Safeway's Vons, and Albertsons) commenced yesterday, two months after the last official session failed. The negotiations are being shepherded by a federal mediator.

    The parties agreed not to discuss details of the negotiations, which were held in an undisclosed location in Southern California.

    The strike/lockout began October 11, affects some 70,000 employees from 852 stores, and is over compensation and health benefits issues.

    Talks are expected to continue today.
    KC's View:

    Published on: February 12, 2004

    Good analysis over on SupermarketGuru.com of the United Press International report that the National Veterinary Services Laboratories (NVSL) - a facility that is part of the US department of Agriculture (USDA) and responsible for conducting all of the nation's tests for mad cow disease - is regarding by some experts as " producing ambiguous and conflicting results," and not worthy of a great deal of confidence.

    The allegations were made by a former USDA veterinarian, who also charges that the Iowa-based NVSL refuses to divulge test results and engages in secretive behavior that could be covering up additional cases of mad cow disease.

    SG.com reports that "the veterinarian maintained in his interview with UPI that while USDA says that the US food supply is free of mad cow disease, "most agency veterinarians know mad cow is prevalent and epidemic (in U.S. herds). We're not talking about one or two cases." He also said that the USDA's relationship with the nation's beef industry is so cozy that it gives business interests priority over consumer safety.

    To read the entire SupermarketGuru.com piece, go to:

    www. SupermarketGuru.com
    KC's View:
    We have to say that there is very little about the government's response to the mad cow crisis that gives us a great deal of confidence that the US is making all the right moves at the right pace in this matter.

    That's not to say that we think there is a massive number of infected cows, nor that there is going to be a sudden outbreak of the human variant of mad cow disease. It’s just that there's this nagging feeling of disquiet, like something else is going to happen that will rattle our sense of security.

    Published on: February 12, 2004

    There are numerous published reports, including an excellent on in The New York Times, about the carbohydrate summit scheduled for next week in Rome, at which "physicians, chefs, pasta manufacturers and other pasta partisans will gather in Italy's capital for a full-boiled response to the advances of the low-carbohydrate Atkins diet, which threatens to put rigatoni on the run."

    The goal of the conference is to establish a beachhead in the nutrition and diet wars, to focus on the healthful benefits of the Mediterranean diet, which "exalts olive oil, recommends restraint around red meat and makes ample allowance for pasta," according to the NYT description. Also on the agenda: a look at the causes of cardiovascular disease, sessions on cooking, and a look at the history of fad diets.
    KC's View:
    No word on whether the autopsy report on the late Dr. Robert Atkins will be one of the handouts.

    Can you imagine? A pasta summit in Rome?

    Wonder if it is too late to get plane tickets and a press pass…

    Published on: February 12, 2004

    Shareholders for both William Morrison Supermarkets and Safeway Plc in the UK have overwhelmingly approved the proposed acquisition of the fourth-ranked supermarket chain by fifth-ranked Morrison for the equivalent of about $5.6 billion (US).

    The acquisition now is expected to be final on March 8, contingent on the divestiture of 52 Safeway units.

    This brings almost to a close a takeover frenzy that began last year when Morrison made a bid for Safeway, inciting competitive moves to acquire Safeway by other UK chains, including Tesco, Wal-Mart's Asda Group, and Sainsbury. In the end, however, UK competition authorities judged that an acquisition of Safeway by any of those companies would have reduced competition, and they only allowed Morrison to move forward.

    Kenneth Morrison, executive chairman of Morrison, called the acquisition "a transforming step." He said, "We have very clear and detailed plans for Safeway and I am confident that we will be able to integrate the two businesses swiftly and effectively."
    KC's View:
    For a long time, we wondered if we'd be dead before this story played out to its conclusion. Luckily, it didn't work out that way…

    We've always believed that a Morrison acquisition of Safeway made the most sense for the UK's competitive balance. We're glad it has worked out this way.

    Published on: February 12, 2004


    • The Dallas Morning News reports that a new online grocery service has been launched in the Dallas area - GoGoGrocer.com, which offers "next-day delivery of everyday items alongside more gourmet, ready-to-cook specialty fare such as prime steaks, tamales and lasagna."

      At the moment, the business is limited to the Park Cities, Turtle Creek, Oak Lawn, Downtown, Uptown and Kessler Park areas, and is sourcing some of its products from local specialty operations that include Campisi's Oven Ready Meals & Pizzas, Mozzarella Co., Wild About Harry's and Rudolph's Prime Meats.

      There are two other online grocery services in the region: Albertsons.com, and Melonseed.net.


    • The Wall Street Journal reports that Blockbuster plans to start up a DVD online rental service to compete with those operated by Netflix and, more recently, Wal-Mart.

    KC's View:

    Published on: February 12, 2004

    The Houston Chronicle reports that Mexico has agreed to lift its ban on US beef and cattle, possibly sometime in the next month, contingent on the implementation of a US program certifying that meat cannot be processed until it has been tested for mad cow disease.

    Mexico banned American beef on Dec. 24 after the first US case of bovine spongiform encephalopathy (BSE), also known as mad cow disease, was found in a cow in Washington State.

    Mexico has been second only to Japan as an importer of US beef.
    KC's View:
    Unless we're reading this wrong - and we don't think we are - it appears that the US is willing to test all the meat being sold to Mexico, but not all the meat being slaughtered for here in the US.

    After all, the United States slaughters about 36 million cattle a
    year, and tested only 20,000 of them for mad cow disease last year. This year, it plans a major increase in testing - to a whopping 40,000.

    Compare that to France, where they test about half of the six million cattle that are slaughtered, or Japan, where they test every one of the 1.3 million cows eaten by the public.

    Published on: February 12, 2004

    Global notes and commentary from PlanetRetail.net…

    Two of South Korea's leading retailers have announced their business plans for 2004, with both continuing their commitment to the hypermarket sector. The country's largest retail force, Lotte, has unveiled a new investment of nearly $420 million in its hypermarket store network, compared to $335 million in its department store division. According to a Lotte spokesperson, "Our investment in discount stores this year will be twice as large as that of last year." The money will be spent on opening eight new outlets and renovating existing stores. The group currently operates 30 Lotte Mart discount hypermarkets.

    Meanwhile, Shinsegae, which operates the largest hypermarket chain in South Korea, has announced plans to invest a total of $669.7 million to open between 12 and 15 new outlets this year. The company already operates 54 E-mart stores in South Korea. In addition, Shinsegae has been operating a satellite E-mart store in Shanghai since 1997, although there are longer-term plans to expand the network to 40 outlets by the end of the decade (including two new stores this year).

    Over the past 10 years, hypermarkets (almost always referred to as discount superstores in the country) have emerged as the major growth channel in South Korea. Shinsegae is widely regarded as having set the ball rolling when it launched the E-mart format in 1993 and since then it has been spreading fast, with little sign of slowing down. According to official data, there were more than 300 hypermarkets in 2003, up from 240 by the end of 2002.

    Almost all of the major players have ambitious expansion plans, with many local players turning their attention from their traditionally strong department store operations to concentrate on opening hypermarkets. In fact, the Korea Chamber of Commerce and Industry (KCCI) believes that the hypermarket sector still has growth potential for the next five years, by which time the number of stores will rise to 500. Revising earlier forecasts, the KCCI now believes the market will become saturated in 2008, and not 2005 as previously thought.

    The local giants, such as Lotte, Shinsegae, Hanwha Mart and LG Mart, are also having to face increasing competition from a rash of major foreign operators that entered the sector during the late 1990s. US giant Wal-Mart entered the market in 1998, while other players include Carrefour, which entered in 1997, and Tesco, which acquired a majority stake in Samsung's distribution operations, in 1999.

    However, South Korea's domestic hypermarket chains are bullish and are generally considered to be performing well against their more experienced foreign competitors. Whereas businesses like Wal-Mart may have the advantage in terms of systems, global buying power and price, local companies have been leveraging their knowledge of the Korean market and consumers to develop their brands to the best effect. Many of the domestic hypermarket chains have invested in renovating their stores to high modern standards fitted with facilities such as cafés and children's play areas. This has proved popular with Korean shoppers, especially when contrasted to the warehouse-style stores belonging to the foreign giants.

    With the potential for around 200 more hypermarkets in the country over the next few years, there is still much potential for further growth in the sector. However, life for both the local and foreign operators will become increasingly tough and it is likely that the next few years will see some degree of restructuring in the market with a number of smaller chains being forced out of the sector or being swallowed up by the larger players. By continuing their strategy of investing heavily now, it will be the likes of Lotte and Shinsegae that will fare best in the future.
    KC's View:

    Published on: February 12, 2004


    • Coupons, Inc. announced the promotion of Chief Operating Officer Jeff Weitzman to the post of President and COO. The company has also promoted Jim Widmann, Regional Vice President Sales, to Vice President of Sales.


    • Bob Nilsen, the president of Burger King Corp., has resigned amid declining sales for the fast food chain.

      No reason for the abrupt resignation was offered, and no replacement was named.

    KC's View:
    We recognize that this is a limited sample, but…

    We don't know anyone…ANYONE…for whom Burger King is the first, second, or third choice when they are in the mood for fast food.

    Published on: February 12, 2004


    • Whole Foods Market Inc. posted first quarter earnings of $38.7 million, compared with $25.6 million a year ago. Sales rose 21 percent to $1.1 billion. Same-store sales at stores rose 14.7 percent.

    KC's View:

    Published on: February 12, 2004

    We got several emails to our piece yesterday about Meijer's layoffs and new-style approach to business.

    One MNB user wrote:

    As a Meijer customer for at least half a dozen years, it has been interesting to note that employee attitudes at a new Wal-Mart supercenter that just opened near us and our closest Meijer seem more friendly than at Meijer.

    Checkout personnel attitudes seem especially friendly in comparison.

    Incidentally, during WMT's grand opening, still going on, Meijer's parking lot has held about 25-35% of the cars it normally has held.


    And MNB user David Livingston chimed in:

    The end is coming soon when you see big layoffs. It could be 5 or 10 years. Maybe sooner. Companies don't grow and prosper when they are cutting costs to the bone. When they do that it is not a matter of prospering but simply surviving. You don't see Wal-Mart laying off 1900 people anywhere to remain competitive. Sure Meijer may have been a little fat in some places, but to dump 1900 people in one shot is an act of desperation.

    Personally, I thought Meijer was running lean to begin with. Wal-Mart knows they have Meijer on the run and can play cat and mouse with them for a few years. Unfortunately, a lot of smaller retailers who are in the way are going to get stomped on.





    We wrote yesterday that we are concerned about proposed legislation that prevents obesity lawsuits - not because we're in favor of frivolous suits, but because we think the justice system ought to be allowed to do its job. To which one MNB user responded:

    OK, Kevin you have showed your “stripes” on this one with “let the courts decide”. One of our major issues in the U.S. is that the courts are increasingly “seizing” power from the other two branches of government. Where does it say that courts can order a legislature to do something as In Massachusetts (forget the topic deal with the “separation of powers” issue)? (California lawmaker) Dutra has every right to introduce this legislation and is entirely right in doing so. We have a “free market” where people choose to do certain things voluntarily. People should not then be able to hold others responsible for what they choose to do on their own.

    Actually, we've been writing this for a long time…our "stripes" have long been visible.

    MNB user Mike Ferguson wrote:

    Again, I applaud the legislators in California who see greedy lawyers planning their attack on food companies. The comparison to tobacco is valid to a point, but there is one fundamental difference.

    People do need to eat. Each of us needs carbohydrates, proteins and fats to live. There are no good or bad foods, there are good and bad choices in the proper mix and quantity of foods we consume. Consider that just ten years ago all of the experts (except Atkins) were recommending high carb, low fat diets. It seems to me that your mother's advice to eat a balanced diet was far better than any fad diet. Suing food companies is strictly motivated by the greed of lawyers. They are well organized and being trained by those who got rich on tobacco legislation.

    Personal responsibility is the only answer in the obesity situation. We can cut portions in half and those who choose to will buy two. We can outlaw soft drinks and people will still have the opportunity to over do it on something else. If a food company sells a fraudulent, dangerous or mislabeled product, they should be held accountable. If they sell a wholesome product, whether it is a candy bar or an apple, they should be protected from the opportunists who want only to become rich.


    MNB user Randal O'Toole wrote:

    Your idea of letting the courts handle the blame in obesity cases ignores the strategies used by trial lawyers. They typically choose to bring cases in jurisdictions where they are likely to win regardless of the law. They also often attack weak companies first and swamp their victims with dozens of suits at once. The result is that the companies settle out of court rather than have to deal with all the lawsuits, setting unfortunate precedents. These tactics make trial lawyers rich and everyone else poor.




    Plenty of response to the Atkins obesity controversy.

    One member of the MNB community wrote:

    The problem with Atkins and other "fad diets" is that they don't offer realistic, lifelong solutions. They may offer quick results, but what then?

    No one is going to live on cabbage soup, grapefruit or bacon and eggs for the rest of their lives. One who practices moderation, exercises and eats a balance and varied diet is the one who will successfully maintain control over their weight.


    Another MNB user wrote:

    You want to lose weight….exercise & stay away from junk food. The more you burn the more you can eat (but use common sense if you think it is bad for you it usually is) . Jack LaLanne has been lost in all of the Atkins hype.

    If you don’t want to die from heart disease…have your cholesterol checked. If it high change your diet or start managing it with the new cholesterol lowering drugs. It doesn’t matter if you are a vegetarian or a marathon runner if your cholesterol is high your arteries will clog and chances are you will have heart trouble somewhere down the road.


    MNB user Marc Lynn wrote:

    I enjoyed reading your rebuttal to the garbage being published about Atkins. It has worked extremely well for me for both weight loss and getting my blood chemistry in order. If we meet up at MarkeTechnics you will see me 40 lbs. thinner than the same time last year. My blood pressure is lower, HDL is higher, and Triglicerides are lower. If fact all blood chemistry is within normal ranges. This was not the case 12 months ago before I started the Atkins lifestyle.

    Good for you. Though we weren't aware that we were supporting the Atkins approach.

    We wrote yesterday that 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. To which one MNB user responded:

    You're assuming that Atkins followed his own diet recommendations. I doubt it, considering his history of heart disease and his weight. Still, I don't agree that consumers will react to this news by abandoning low-carb diets. Americans want this diet because it allows them instant gratification, and long-term effects are not paramount in their minds.

    Yet another member of the MNB community chimed in:

    More hype raised by our friends at PETA! Need I say more?

    Another MNB user wrote:

    Great piece on the Atkins mess. Yes, one would think that after you've had a heart attack you might question whether the old body chemistry will work properly on the Atkins regimen. Keep pounding the Moderation in amount, Balance in diet and Exercise in regularity drum. How can so many people not hear common sense screaming this to be the way?

    MNB user Russ Fair was a bit outraged by all the discussion:

    This guy's privacy should be protected under the HIPAA privacy legislation and we have no business discussing it.

    And another MNB user agreed:

    We all should be ashamed of ourselves. We're like a bunch of vultures just waiting for the next wounded target to pounce on.

    Doesn't matter if that target is deceased. Leave the man alone! This is no better than our fixation with Janet Jackson's escapade!


    Hey, we're just trying to make a clean breast of things…




    MNB user Richard Lowe wrote:

    If you want to explore diet this is an area that makes a lot of sense and is proclaimed to be the holy grail of food by those involved. Suggest you look up raw food, live food, raw diet, tree of life on Google and read some of this stuff or go to the library and see what they have on the subject. They make a lot of sense when it comes to organic farming, and how we should eat and live. The trouble is one must be very conditioned and have a great amount of self-control with the world in another realm. There are also raw food restaurants springing up in the west coast.

    We accept the notion that this movement probably is good for people, good for us.

    But sorry. We're not going there.

    Another MNB user wrote:

    What to eat?

    Check out Discover Magazine, Feb 2004 issue. Results of a Harvard Medical School study of 121,700 nurses since 1976... the most definitive of its kind. Answer - a carb controlled diet with less saturated fats based upon the health results of these nurses.

    Doesn't claim that Atkins or Ornish is right or wrong, but that a carb controlled diet is extremely important. Thus, this should not be a fad but rather should become a basic shift in the eating habits of everyone. (The article explains glycemic index and loading and it's relationships from the food we eat.)







    Regarding yesterday's interview about RFID, MNB user Bob Vereen wrote:

    Interesting interview in today's newsletter about RFID. From some other newsletters I get about overseas retailing, Wal-Mart is not alone.

    Metro, which is a huge German firm operating hypermarkets (supercenters), a DIY chain, etc., also is adopting RFID and has notified its key vendors that they must be up to speed by November. That's ahead of Wal-Mart's timetable over here.

    Marks & Spencer, the UK chain, also is on a faster track.

    I recall reading about some others, but don't recall the firm names enough to mention.

    I think you will be doing your readers a great service to keep us up to date on this. You are far more knowledgeable about retailing and distribution and thus better qualified to write about it than the
    general press, which has been touching on the subject from time to time.


    We're blushing…




    Regarding reimportation of inexpensive drugs from Canada, one MNB user wrote:

    A long term business friend and I were laughing about all the concern in regards to drug importation. Funny 5-10 years ago when he sold all the US distributors and Drug chains, he used the Canadian system to import and made additional profits. IT WAS OK. My friend always shared with me all the majors he sold years ago. Now our citizens are ordering direct from Canada and saving money.

    Importation has become a dangerous game???? And bad for business.





    And there is continued response to the Eddie Basha remark comparing Wal-Mart's march to an "economic Holocaust."

    One MNB user wrote:

    There's a heightened amount of sensitivity on Nazi references now, especially with the WWII generation and Holocaust survivors passing away, that the brutality and absolute inhumanity represented will be lost as revisionist history will take over if there's no one to keep the true picture of that era alive and use of the "Nazi" label becomes just a throwaway line. Not to mention what is bound to be a very controversial few days for some with the release of Mel Gibson's movie.

    It's interesting to note however that certain humor references to Nazis (i.e. Mel Brooks' The Producers and Seinfeld's Soup Nazi) can be accepted in most quarters as humor is used as the vehicle to depict and show horrific events for what they are.


    Also on the Basha comment, one MNB user wrote:

    It’s nice that you include links and cite reference so that people can read for themselves and form their opinions before sharing.

    This reader went on to suggest that we should have included a comment from the original newspaper article, in which Bill Straus, Arizona regional director of the Anti-Defamation League, said: "Knowing Eddie Basha, there are few great champions for justice in Arizona. With that said, I think the last thing in the world he intended to do is to trivialize the Holocaust. . . . We have dozens of Holocaust survivors living in Arizona. I can tell you any reference to the Holocaust strikes them extremely profoundly."

    We responded via email: "You may be right about that...I certainly didn’t leave it out because of any agenda. Rather, I thought the story really was about the great passion that Basha felt about the issue, and that we didn't need the anti-defamation league to tell us whether or not it was appropriate. We could decide that ourselves...and the responses I've gotten would suggest that this is true."

    I have enjoyed your page for a couple of years now, and will continue to do so. My concern was the reaction of some of the readers to Basha’s comments. People react to sound bites with attacks and threats without examining the full context. Everyone is entitled to their opinion and we should keep it that way. It was the first time that I had seen or remembered such a reaction to anything on MNB. I don’t necessarily agree with the “blitzkrieg or holocaust” metaphors, but I don’t think that Mr. Basha should be damned or made to be a villain for using them. I only hoped that a full read of the article would allay any concerns that anyone has.

    Another MNB user wrote:

    Those that choose to complain and not fight will not be long for this world. Competition is the key to the free enterprise system, and even if Wal-Mart makes it hard, those retailers that differentiate themselves from the rest can survive.

    There is no doubt that Wal-Mart has changed the way we go to business everyday, but there will always be a place in this country for innovative, creative retailers.

    Crying in our soup won't make Wal-Mart go away, so you need to learn to live and compete with them or go the way of the dinosaur.





    And, regarding the Starbucks-Dunkin' Donuts competition…

    One MNB user wrote:

    I feel like Dunkin Donuts got no credit from the masses! I am sipping my warm cup of what I refer to as "drinkable coffee" rather then the shock flavor of Starbucks. I even got a Dunkin Donuts Christmas ornament cup for my tree this year. For under $2, I always get a consistent cup of coffee served quickly. For an afternoon fix, the Chai Tea is great too!

    Another MNB user wrote:

    I live in the coffee mecca and I would go out of my way to AVOID Starburnt coffee. In fact if Starbucks was the only coffee available I would pass on the coffee. Seattleites have been long time coffee drinkers, long before Schultze came to town. Give me some good Mayorga coffee thank you very much.




    We wrote the other day about online grocery models, and MNB user Glen Terbeek responded:

    Your comments yesterday that read "Our position continues to be that the next generation has absolutely no allegiance to traditional modes of supermarket shopping. Give them another decent option, and they'll embrace it" is right on.

    And guess what, the "next generation" will be manufacturers working together using third party consolidators/distributors (FedEx, UPS?) to reach their targeted consumers directly (frictionlessly). It will be funded by the trade dollars (up to 18% of their revenues). Why will this happen, because the manufacturers have always followed the least resistance to the shopper. And they will be able to control pricing, compete on product attributes, and get great consumer information. What more would they want?





    Regarding Wal-Mart's plan to work with Time Inc. to create a new, exclusive women's service magazine to be sold only at the Bentonville Behemoth's stores, one MNB user wrote:

    It will be interesting to see the ratio of the new Wal-Mart magazine's ads of Wal-Mart suppliers vs. non-suppliers, and if non suppliers are even invited (read: allowed) to participate as advertisers. Will Bentonville, as a publisher, "encourage" the new mag's editors or, rather, insist that stories have "traditional" editorial distance from advertisers and thus hopefully remain unbiased? Does this mean suppliers be "encouraged" or, ahemmm, arm twisted to become advertisers? Bet they're all lining up, or redirecting, ad dollars right now!

    Based on sheer number of readers, this mag will automatically become a powerful 'tool' for shaping American consciousness and personal retail preferences. The problem isn't editors without assistants, although I commiserate with them (and with you too, Kevin!). The real problem is the potential this mag has to dish out highly biased content with backroom pandering that most of its readers will never be aware of. A bit Orwellian? Perhaps. Wonder if they'll have a guts to put a statement on the masthead indicating their 'real' advertising policies...


    And another MNB user wrote:

    What's the first step when taking over a country? Control the media!

    Exactly. But not us…




    Also about email, MNB user Mike Campeau wrote:

    Let me make it clear up front that I'm not a Wal-Mart fan. I live in Canada and would prefer to see my buying dollars go to local businesses. But not at the expense of the consumer.

    It always amazes me when people or companies whose performance is less than desirable look for someone or something else to blame instead of taking a good hard look in the mirror. For some unknown reason (usually based on emotion, not facts), it is often those performing well who get blamed for the loser's poor results. The winner must have cheated, right? He couldn't possibly have developed a better plan than me or executed it more effectively than I did, right? Isn't this how children react?

    If the winner has been found guilty of some crime or misconduct, that's one thing. Until such improprieties are proven, however, there is only one word that describes all this negative talk -- WHINING!!

    Grow up, folks. Reasonable people aren't swayed by these childlike reactions. They consider the source of this kind of talk before taking it seriously. What they are not hearing during all of this "Oh, poor me!" and "The consumer owes his local suppliers a living!" kind of talk is any discussion about taking better care of the customer.

    They're getting more focus and attention from the winner, so that's where they'll continue to go until they see something better from the competition. They have every right to make that decision because it's their own hard-earned dollars they're spending, right?

    Remember, Wal-Mart is not the real problem. They just happened to be the company who saw a better way to give the consumer what he wants and took action. If it wasn't them, it would just be someone else.

    When you don't pay enough attention to your meal, there will always be someone who comes along and eats your lunch!





    And, our favorite email of the week comes from an MNB user on the subject of food safety:

    I cannot eat COWS, CHICKENS or SALMON. Maybe I will become a Vegetarian and glow at night from Acid Rain!!!
    KC's View:

    Published on: February 12, 2004

    Ahold announced its intention to divest its Bi-Lo and Bruno's subsidiaries in the Southeast US, as a part of its "strategy to optimize its portfolio and to strengthen its financial position by reducing debt." It hopes to complete the sale this year.

    The company said that once the divestitures take place, it would "focus its efforts on its remaining U.S. food retail operations, including Stop & Shop, Giant-Landover, Giant-Carlisle, Tops, and Peapod, positioning those companies for growth."

    It was just last week that Ahold announced that it would be consolidating its Giant-Landover management with Stop & Shop's, moving the Washington, DC's operations to Boston; it already has been combining Top's management functions with those of Giant-Carlisle.

    Anders Moberg, Ahold President & CEO said, "We believe that Bi-Lo and Bruno's are both powerful brands and will have a bright future under new ownership. We hope to identify buyers whose strategic priorities include further strengthening these businesses to succeed in a competitive but fast-growing marketplace.''

    Ahold USA President and CEO, Bill Grize said, "We are confident that this decision will position Bi-Lo and Bruno's for long-term growth in their respective markets, with the intent of creating more value for associates and customers.''

    South Carolina-based Bi-Lo was acquired by Ahold in 1977, while Alabama-based Bruno's was bought by the Dutch company in 2001.
    KC's View:
    First of all, let us say with some degree of pride that in an email to MNB that was posted a few days ago, one member of our community predicted this move. (Do we have great people or what?)

    That said, we're have to say that we're amused by Moberg's and Grize's comments about how this move is good for Bi-Lo and Bruno's. It, in fact, may be good for those two chains, but that's not why they are being divested. They’re being divested because Ahold has gotten itself into a vat-load full of trouble because the company’s previous management, led by Cees van der Hoeven, allowed a culture to fester there that allowed financial irregularities to flourish to the tune of a billion-dollar accounting scandal.

    By the way, a Dutch shareholders group asked a court there to start an investigation into actions taken by the management of retailer Ahold during the period 2000 and 2003.

    The shame is that Ahold was building something here in the US, and it wasn't that long ago that the sky seemed to be the limit. What it was building is now being dismantled. Whether this is a good or bad move for competition will depend on what company acquires Bi-Lo and Bruno's.

    Published on: February 12, 2004

    Wal-Mart Stores has filed two lawsuits, with the California State Superior Court and the Federal Court, challenging the Turlock City Council's adoption of an ordinance that will prohibit retailers with total sales floor area in excess of 100,000 square feet from devoting more than 5% of the sales floor area to the sale of non taxable merchandise, such as groceries and prescription drugs

    The ban is seen as a direct repudiation of Wal-Mart Supercenters.

    The Turlock City Council passed the controversial ordinance on December 16, 2003.

    "Wal-Mart seeks the Court's intervention to prevent the City's unconstitutional attempt to restrict competition and regulate interstate commerce," Wal-Mart spokesman Peter Kanelos said. "Targeting Wal-Mart with irrational restrictions is not a legitimate function of city government."

    Wal-Mart's plans include opening some 40 supercenters in California over the next five years, but has met pockets of resistance from certain communities. In some cases, Wal-Mart is responding with litigation; in others, it is pushing for referenda that go directly to the voters.
    KC's View:
    We think we've had a change of heart about this whole issue.

    We used to believe that communities should feel free to take such actions, but we're beginning to think that it may not be the smartest approach. Wal-Mart will litigate its way around the restrictions, pour money into campaigns that will supersede the laws, or will just open 99,000 square foot stores to which the restrictions don't apply.

    It just wastes time and money most of these municipalities don't have.

    So here's what these communities ought to do: triple or quadruple the tax rate for all such stores so that the increased tax revenue can support the new stresses put on the local infrastructure, pay teachers better money, put more computers in the classrooms, hire more cops.

    There are too many communities out there that do exactly the opposite - offer tax breaks to the world's richest and most successful company as way of getting them to come to town. And sure, they may generate more sales taxes…but the time has come to really take advantage of Wal-Mart's (and other similar company's) desire for world domination.