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    Published on: May 5, 2004

    After a long and likely uncomfortably public search process, the Coca-Cola Co. has announced that E. Neville Isdell, who spent 35 years with the company until being passed over for the CEO job in 2001, will return to Atlanta as CEO when Douglas Daft retires this summer.

    Isdell left the company when Daft got the top job, but told the New York Times that he was not bitter. "I've been outside the system for two years," he said, "and that has made me far better prepared to lead this company than I was in the past.''

    Donald R. Keough, the Coke director who headed the search committee, told the NYT that Isdell always was the front-runner. "He was the first outside candidate we talked to,'' he said, "and the only one who was offered the job."

    That may be, but there have been numerous press reports over the past few weeks about top industry names who were either being considered or who took themselves out of the running. Gillette’s James M. Kilts, Kellogg’s Carlos M. Gutierrez, and Mattel’s Robert A. Eckert all were mentioned as possible successors to Daft, but none of the apparently wanted the job.

    There was one internal candidate, Steven J. Heyer, the president of the company who many assumed was being groomed as Daft’s successor. But he didn’t get the top job either.
    KC's View:
    The analysts we’re reading say that despite all sorts of investigations, Coke is in good financial shape and has made the cuts it needs to make to be more efficient. The biggest challenge for Isdell likely will be to position the company in the anti-obesity continuum, figuring out how to better appeal to a population that is becoming increasingly weight-conscious. The company’s new mid-calorie C2 soft drink is a start, but PepsiCo certainly seems to have been more aggressive in this segment.

    PepsiCo’s Brock Leach told obesity Learning Lab attendees at the Food Marketing Institute (FMI) Show yesterday that virtually all the company’s growth was coming from “better for you” and “good for you” products…which is a remarkable trend.

    Published on: May 5, 2004

    The US Senate has rebuffed moves by the Bush Administration’s Department of Labor to change rules on who must be paid for overtime work. Five moderate Republicans joined with almost all the Democrats in the Senate to vote against changes that critics charged would deny overtime pay to millions of white-collar employees.

    However, it is still to be seen whether the Senate’s move will succeed in blocking the Labor Department’s proposed changes. The vote was on an amendment to a corporate tax bill that is by no means assured of passage.

    In addition, the House of Representatives voted last year to block the proposed overtime changes, but has not held a vote this year.
    KC's View:
    It’s an election year. No matter which side of the aisle these guys are on, it’s all about getting votes and shoring up the base…not doing what ultimately is right or appropriate.

    How’s that for cynicism?

    Published on: May 5, 2004

    This morning, as part of its series on food and nutrition, USA Today reports that “a number of nutritionists are calling for Americans to reduce their risk of cancer and other diseases by cooking at home more and eating out less.”

    The reason: when people eat out, they are a lot more likely to make poor choices, consuming 50 percent more calories, fat, and sodium than they do when eating home cooked meals. Restaurants often don’t focus on fruits, vegetables, whole grains, beans and other vitamin-rich "powerhouse foods," nutritionists say.

    The Washington-based American Institute for Cancer Research, which focuses on the link between diet and cancer, has published a pamphlet, "Homemade for Health,” that explains how and why consumers should cook at home.
    KC's View:
    Boy, does this play into supermarkets’ sweet spot or what?

    Now they just have to do something about it. One of the keys, we think, is taking it in a positive direction…it isn’t about denial, but rather about indulging in a different kind of choice.

    If supermarkets could actually make the argument, “Indulge Yourself – Cook Your Family A Meal”…well, that would be an almost revolutionary approach.

    We’ve said for a long time that the industry ought to take up as a goal getting families to eat one more meal together at home per month. Want to drive sales? More home cooking and more meals at home clearly is the best way…and the industry ought to focus on these initiatives not just as business but also as social issues.

    Published on: May 5, 2004

    Ahold CEO Anders Moberg told the Financial Times that he does not rule out an eventual sale of the company after it completes its restructuring. “We are looking at all the options,” he said. “There can always come a situation like last year when we were almost forced to sell the company”.

    Moberg also said that as the company tries to sell its Bi-Lo and Bruno’s chains in the US, the future focus will be on expansion in central Europe because of incentives offered by the European Union. The goal is to reduce the company’s reliance on its US properties.

    In other news, Ahold said that the terms of its contract with Nordic retailer ICA may require it to buy 20 percent more of that company. The purchase of the ICA shares held by Ahold’s joint venture partners is required if another partner does not increase its stake in ICA.

    Ahold has said that the more than $2 billion (US) earmarked for the ICA purchase otherwise would be used to pay down debt.
    KC's View:
    How quickly the mighty have fallen.

    Perhaps it’s just because we’re here in the US, and we know that Europe is a growing market, but we can’t help wondering if it is wise to move away from the US.

    We have no idea if this is accurate, but there are those who have said that Moberg’s relationship with Ahold USA is roughly equivalent to that Pope’s relationship with the American Catholic Church – it is this sort of foreign body that he doesn’t entirely get.

    We can’t imagine that this is true, and we’ve heard from some Ahold folks that they are impressed with Moberg’s approach.

    Either way, it’s a shame that a company considered an enormous US powerhouse now is perceived as a company in retreat here. But maybe that’s what restructuring is all about.

    Published on: May 5, 2004

    A new study by the Medical College of Georgia suggests that teenagers who drink several soft drinks each day run the risk of increasing their blood pressure and the risk for developing hypertension. The study also suggests that black teenagers are more at risk than teens in other ethnic groups.
    KC's View:
    Ed Slaughter of Rodale Press told the obesity Learning Lab at the Food Marketing Institute (FMI) Show yesterday that the most recent research suggests that kids who drink soft drinks are no more likely than those who don’t to suffer from obesity…but apparently the soft drink biz isn’t going to get off that easily.

    Published on: May 5, 2004


    • Reuters reports that leading Canadian food retailers including Loblaw, Sobey’s, and Metro all are engaged in aggressive price cutting as a way to stave off competition from Wal-Mart Supercenters.

      The interesting thing about the strategy is that Wal-Mart says it has no plans to bring supercenters to Canada. It does, however, have discount stores and Sam’s Club units there.


    • Wal-Mart reportedly is testing the sale of wine in its Canadian stores, partnering with the company’s largest winery to create “Wine Rack” boutiques in three units, carrying only Canadian wine priced between $7.97 and $30 a bottle.

      If the test works, the company plans to roll the concept out across Canada.

    KC's View:

    Published on: May 5, 2004

    Publishes reports say that Costco, which has largely focused on stand-alone stores, is looking to build as many as five stores in the Los Angeles market attached to existing malls.

    In part, the decision comes as Costco – which has 25 Los Angeles-area units – is having a hard time finding locales for as many as five more. Malls looking for high-traffic anchor tenants would seem to be an answer to this problem.
    KC's View:

    Published on: May 5, 2004

    The Baton Rouge Advocate reports that Alimentation Couche-Tard is looking to sell 23 of its Circle K stores because they do not fit the company’s overall strategy and are not profitable enough.

    Fifteen of the stores are in Louisiana, six in Florida, one in Alabama and one in Mississippi. The company is hoping that the sale will generate more than seven million dollars in revenue, and has said there is no deadline for the sale.
    KC's View:

    Published on: May 5, 2004


    • Safeway Inc. reported first quarter earnings of $43.1 million, down from $162.6 million during the same period a year ago. The company also reported that first-quarter sales fell five percent to $7.6 billion from $8 billion.

      Safeway management attributed the declines to the impact from the four-month labor strike in Southern California.

      However, excluding stores involved in the dispute, same-store sales for the period were down 1.3 percent.


    • Publix reports that first quarter sales reached $4.7 billion, an 8.2 percent increase over the first quarter of 2003. Same-store sales were up three percent.

      Earnings for the period reached $203.4 million, up from $187.1 million a year ago.


    • Whole Foods reported net income of $35.3 million for the fiscal second quarter ended April 11, up from profit of $25.6 million in the same period last year. Sales climbed 24 percent to $902.1 million from $725.1 million. Same-store sales rose 17 percent.


    • Rite Aid Corporation reported that for the four weeks ended April 24, 2004, same store sales rose 5.4 percent over the prior-year period. Total drugstore sales for the four-week period rose 4.9 percent to $1.305 billion compared to $1.244 billion for the same period last year./LI>

    • Walgreen Co. reported April sales were $3.18 billion, up 14.9 percent. April pharmacy sales climbed 17.2 percent overall, while same-store pharmacy sales rose 13.2 percent.

      Same store sales were up 10.3 percent.

    KC's View:

    Published on: May 5, 2004


    • Food Lion has named Ty Burns to be the company’s vice president of retail operations - Atlantic Division, overseeing operations of 220 Food Lion stores in Maryland, northern Virginia, Delaware, Pennsylvania and West Virginia.

      He succeeds James Egan, who is now Food Lion's vice president of deli, bakery and home meal solutions.

    KC's View:

    Published on: May 5, 2004

    …will return. Really.
    KC's View: