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    Published on: November 3, 2005

    Ed Kolodzieski, a longtime food industry executive and currently senior vice president and chief operating officer of Wal-Mart International, has been named CEO/president of Seiyu, the Japanese retailer that is in the process of becoming a Wal-Mart subsidiary. Kolodzieski has been on the Seiyu board for about two years.

    The appointment takes effect December 15. Seiyu CEO Noriyuki Watanabe stays on as company chairman. The move gives Wal-Mart control of six out of 11 Seiyu board seats.

    Wal-Mart first made an investment in Seiyu in 2002, and has been gradually increasing its ownership position. At about the same time that Kolodzieski takes over, Wal-Mart will own about 54 percent of Seiyu, with the option to buy even more stock in coming years.

    However, despite the fact that Wal-Mart has been working with Seiyu to streamline its supply chain and improve its merchandising strategy, the Japanese chain has continued to generate disappointing numbers – something that Kolodzieski will be expected to turn around.

    The Kolodzieski move is part of an ongoing series of executive shuffles at Wal-Mart. It was just a month ago that John Menzer, who has led the company’s international expansion efforts for the past half-dozen years, moved over to become vice chairman of Wal-Mart’s US stores. At the same time, Mike Duke, president/CEO of Wal-Mart’s domestic retailing operations since 2003, became vice chairman for international stores.
    KC's View:
    We’ve known Ed Kolodzieski for a lot of years – since his days at Kash n’ Karry and Ingles - and we’ve always liked him. We can guarantee the folks at Seiyu that they’re being led by a straight shooter…and we can say that because Ed is the only person who ever has taken us on a series of store tours with a gun strapped to his ankle.

    At least, the only one that we know of.

    And we’re pretty sure that the gun wasn't being carried in the event we got out of line…

    We’re not suggesting anything illegal or improper. The fact is that Ed Kolodzieski has, in most of the communities where he has worked, signed up to be part of the local police auxiliary, on call at all times in case of trouble or need.

    This explains the weapon…but it also, in our mind, suggests a desire and a drive to be part of the local community, to understand it and, yes, bring order to it.

    Qualities, we suspect, that will serve Ed well in his new role.

    Published on: November 3, 2005

    • A Missouri judge has certified litigation charging Wal-Mart with underpaying its hourly workers in that state as a class action suit.

      The suit, originally filed in 2001, “contends that the world’s largest retailer committed ‘acts of wage abuse’ against its hourly employees by forcing them to work off the clock, failing to pay them overtime, and preventing them from taking rest and lunch breaks,” according to a report in the Kansas City Star.

      Wal-Mart released a statement saying that it intended to defend itself vigorously, and charging that because of its size and deep pockets, it has become a target for such suits.

      Wal-Mart spokesman Bill Wertz told the Star: “We’ve looked into this and we believe our policies are fair and lawful. While there may have been some incidents where a manager has violated our company’s policy, where we’ve become aware of it the responsible manager has been disciplined.”

      Expectations are that the case will not go to trial for at least a year.

    • Numerous published reports take note of the economic summit that Wal-Mart is convening in Washington, DC, tomorrow, which will bring together economists to debate the company’s impact on both the national economy and local companies. The session will be attended by more than 80 people from the media and academia.

      Analysts note that Wal-Mart is making the move in order to combat the negative image that it has in many quarters, but also suggest that it is a risky proposition – after all, it won’t be able to control what people say about it in a public forum.

    KC's View:

    Published on: November 3, 2005

    The Dallas Morning News reports that while the federal and Texas state governments have closed their investigation into the first case of indigenous mad cow disease in the US – identified in Texas earlier this year – documents suggest that trying to track the cow’s origins and movements was problematic, and that in fact the many cows from the herd linked to the infected cow were slaughtered and may have gotten into the human food supply.

    The reports, compiled for the Texas Animal Health Commission, say that about 350 cows from the 413-head herd, or about 85 percent of the total, were sent for slaughter. The Morning News< writes that “the investigators' searches for feed records as well as ‘animals of interest’ went back years, but many records were no longer available.” In fact, officials are not even sure how the afflicted cow was infected with mad cow, according to the report.

    Critics of the existing system say that it is likely that at least some of the slaughtered cattle probably made it into the human food supply. The concern is that mad cow disease is linked to a chronic brain-wasting disease in humans called new-variant Creutzfeldt-Jakob, which can take years in incubate before symptoms develop.

    Government officials, however, say they are confident that no infected beef got into the human food supply.
    KC's View:
    Wish we shared their confidence.

    We continue to believe that the US ought to adopt the Japanese system – test every cow.

    We also ought to make sure that every cow is tagged at birth with an RFID chip, so that we can use technology to track their origins and movements.

    Our friend Phil Lempert likes to say that mad cow is the “food safety bomb waiting to go off.” We agree with him on this, and cannot understand why government and industry are dragging their feet.

    Published on: November 3, 2005

    The Wall Street Journal reports that California-based Micro Analytical Systems Inc. has developed a testing procedure that will allow seafood suppliers to effectively measure mercury levels in fish – a concern because of warnings that mercury in fish can harm unborn children if the pregnant woman eats too much of it.

    However, some government officials say that such a system could create a warning system that would create undue worries about seafood safety.

    "The danger is that if you start labeling everything with mercury levels, there will be a concern that mercury is a bigger deal than it actually is, and all segments of the population will say 'I just don't want to take the risk,' " David Acheson, a food-safety director for the US Food and Drug Administration (FDA), tells the WSJ. "Then they'll miss out on a healthy food."
    KC's View:
    Here’s what we don’t understand.

    How come providing information is seen as negative?

    It is the same question we ask when we read that the government won’t allow meat manufacturers to test their own products for mad cow disease and then market them as being free of the infection. The argument seems to be that such information will create needless fears among consumers.

    We don’t get it.

    Published on: November 3, 2005 reports that “Ahold is back in the black after cutting costs and reorganizing,” and CEO Anders Moberg is implementing new strategies that it hopes will help it compete more effectively in the markets it serves.

    “Worldwide, the company is investing $2 billion this year to remodel or replace older stores,” FreshMarket reports. “In the U.S. Moberg plans to reposition Ahold toward the upper end of the market. A new Giant supermarket in Camp Hill, Pa., features an in-store cooking school, and a child-care center. In Europe, Ahold is cutting prices to fend off the discounters. Its Dutch flagship, Albert Heijn, has regained market share by slashing prices on more than 7,500 items.”

    The story also notes that Moberg is tightening the reins, especially in the US, centralizing control over marketing and merchandising and taking advantage of efficiencies wherever possible.
    KC's View:
    We just hope that Ahold isn’t emphasizing efficiencies over effectiveness.

    Published on: November 3, 2005

    Unionized employees at A&P-owned Farmer Jack stores in Michigan have agreed to a new contract that will cut their pay by 10 percent starting in January – but also will give them a 12 percent pay raise over the next five years and a share in any profits over $1 million starting next March. The contract also guarantees that Farmer Jack will keep at least 60 of its 71 stores open until March 2007, and transfers the contract to a new owner if the company is sold.

    While A&P has been trying to sell Farmer Jack, lately the company has seemed more intent on making things work there again – and told its employees that it needed the contract concessions in order to survive.
    KC's View:
    Okay. Now it is time for Farmer Jack to create compelling stores that find new ways to appeal to shoppers’ needs and desires.

    Time is short.

    Good luck.

    Published on: November 3, 2005

    San Francisco Mayor Gavin Newsom announced a partnership with the state’s supermarket retailers that calls for reducing the number of bags entering the waste stream by 10 million by the end of 2006 and increasing checkout bag recycling. The Letter of Agreement was signed by the Mayor, San Francisco Department of Environment (DOE), Albertsons, Inc., Safeway Inc. and four charter grocery companies represented by California Grocers Association President Peter Larkin.

    “The California grocery industry is pleased to work with the Mayor to reduce, reuse and recycle grocery store checkout bags,” said Larkin. “We believe grocers that operate in San Francisco can make a significant impact to help customers reduce plastic and paper bag use.”

    The six grocery companies, representing eight different store banners and 60 percent of the 57 stores located in San Francisco include Albertsons, Andronico’s Markets, Bell Markets, Cal-Mart Supermarket, Cala Foods, Foods Co., Mollie Stone’s Markets and Safeway Inc. most of the remaining grocery companies in San Francisco are expected to sign the agreement.

    Participating stores can use different strategies to reach the bag reduction goals including, but not be limited to: bagger retraining, selling reusable bags, minimizing double bagging and promoting in-store recycling. Several of the participating companies already provide bag recycling bins in their stores, while others sell reusable bags.
    KC's View:

    Published on: November 3, 2005

    The Los Angeles Times writes that “in the last 12 months, conservative advocacy groups have urged their millions of members to stop buying brand after trusted brand. Boycotts have long been a mainstay of both the right and the left, but analysts say there's a new intensity to the protests as social conservatives test their ability to punish companies for taking liberal stances on issues such as abortion and gay rights.”

    Among the companies that have been targeted are Levi Strauss (for donating to Planned Parenthood), Johnson & Johnson (for advertising Tylenol in a gay magazine), Procter & Gamble (for advertising on gay-themed shows like “Queer Eye for the Straight Guy” and “Will & Grace”), Ford Motor Co., Allstate Insurance, Nike, and now, American Girl, which is said to have donated money to a nonprofit organization that supports abortion rights.

    It is about to get more prevalent. The Times reports that the “Illinois Family Institute, a conservative lobbying group…is considering calling a boycott against Kraft Foods and Walgreens to pressure them to withdraw their support of next summer's Gay Games in Chicago.” And there is concern about the number of major companies – American Express and Anheuser-Busch among them – that are buying commercial time on Logo, the new, Viacom-owned cable channel that is targeted at gay viewers.
    KC's View:
    Liberals can hardly be outraged by such efforts. After all, it was liberals who were boycotting grapes back in the Cesar Chavez days, trying to influence change in how migrant farm workers were treated in this country.

    It’s just that conservative groups are a lot more organized and effective than the liberals.

    Boycotts are a fine old American tradition, and even if they weren’t, there would be precious little that anyone could do to stop them.

    We have to be honest here, though. Even though we sympathized with the farm workers, and even was fortunate enough to meet Cesar Chavez back in the halcyon seventies, we continued to eat grapes. Call it a moral flaw, but grapes are among our favorite foods.

    No matter how we might feel about values issues, we’re not going to stop using our Amex card, or drinking Budweiser, or taking Tylenol, or using P&G products, because they are advertising their products in gay-themed media. The way we figure it – and we know we are going out on a moral limb here – gay people have a right to drink beer, cure their headaches, or ring up big credit card bills just like straight people. And those companies have a right to try and get gay money just like they have a right to get straight money. Last time we checked, it was all green. (Though those new color-tinged twenty dollar bills certainly raise some issues…come to think of it, they look like they might have been designed by the folks from “Queer Eye.” Maybe we should all stop spending hard currency…)

    (By the way, now that George Takei, the actor who played Sulu on “Star Trek,” has come out of the closet, does this mean that these folks will be boycotting not just all “Star Trek” TV series, but also all the networks and channels that show them? And will they stop watching professional basketball, now that Sheryl Swoopes of the WNBA has said that she’s gay? Just curious.)

    Sure, folks have a right to boycott any and all of these companies and call it sticking up for moral values.

    Just as we have a right to suggest that some of the boycotting groups are being just a wee bit intolerant, and perhaps even are guilty of institutional bigotry.

    That’s America. Red, white & blue. (But never, apparently, pink.)

    So, boycott away. We may disagree with you, but we toast your freedom of self-expression…and do so with a Bud, which we will pay for with our Amex.

    Published on: November 3, 2005

    • Visa USA announced that it will reduce interchange fees charged to retailers on credit card purchases of $15 or less. In addition, it said that retailers no longer will have to get signatures for purchases of $25 or less; it used to be for purchases of $15 or less.

      The move seems to be a reaction to lawsuits filed against the company for charging excessive transaction fees.

    KC's View:

    Published on: November 3, 2005

    • Walgreen reported October sales of $3.65 billion, up nine percent from a year earlier. Same-store sales were up 6.5 percent.

    KC's View:

    Published on: November 3, 2005

    • BJ's Wholesale Club announced today that John Polizzi has been appointed senior vice president, Chief Information Officer. Polizzi succeeds Roland LaFerriere, who will retire in December after 31 years with the company.

    KC's View:

    Published on: November 3, 2005

    MNB had a story the other day about the move to allow organic products to include some synthetic ingredients, a position supported by the Organic Trade association (OTA). We sort of had a problem with this…and one MNB user addressed our concerns:

    Your first reaction is understandable, ie, that "lowering" standards could jeopardize organics. But as someone who has done a lot more reading on this issue recently, my perception is that the legislation that the OTA supported was aimed at continuing the standards the community that has supported organics for a very long time had already evolved under the watchful eye of the National Organic Standards Board (which allowed 95% organic products to qualify for the "organic" sticker). The lawsuit that ruled this 5% accommodation as unauthorized was appropriate for purists, but seemed certain to many of us to have many unintended consequences in the availability of the organic products that have built the industry over the last two decades. If you decide to pursue this issue, please take a look at the OTA website, where a position is posted along with several other points of view supporting this legislation that supports the last several years' status quo rather than causing a deterioration to the standards that have been in place.

    MNB user Sue DeRemer wrote:

    People who choose to purchase organic foods (usually in alternative retail formats like Whole Foods and local health food stores) are committed label-readers. Supposedly organic products that contain artificial ingredients will be shunned by shoppers in these channels.

    Unfortunately, these products will be introduced in mainstream Food stores, and purchased by trusting people who are not label readers.

    If I were a mainstream retailer with a "natural foods" section, I would be sure not to include products with artificial ingredients in that section, for fear of alienating the core natural / organic shoppers.

    It's sad when laws are passed to cloud consumer knowledge.

    On the subject of a judge tossing out much of a lawsuit filed by Wal-Mart asking that the retirement benefits of former chairman Tom Coughlin be voided – Coughlin is accused of defrauding the company for his own personal profit – one MNB user wrote:

    I don't think Wal-Mart really has any intention of actually suing one of Bentonville's most beloved citizens.

    They are just going through the motions to please the public. Wal-Mart will probably keep losing in court, and losing on purpose.

    Expensive motions.

    And if Wal-Mart were doing that – spending money on a case it has no intention of winning – wouldn’t it be a kind of fraud?

    We don’t think this is the case.

    Responding to a story about the “politics of fat,” we ran an email the other day saying that ”being obese is just as unhealthy as smoking. People can control their weight just like they can quit smoking. Why should smokers be penalized for everything and treated as social outcasts. Some may argue that second hand smoke warrants this treatment. Yet we pay higher and higher health care rates due to the increase in obesity-related illnesses.

    MNB user Kelly Cox Semple disagreed:

    I couldn't let this reader's comments (below) go without noting a few points.

    • First, weight does not automatically equate to bad health. It is flat out wrong to say that all fat people are unhealthy, in the same way it's incorrect to say that all thin people are healthy. Replace weight with height, and see how the argument works (all tall people are healthy while all short people are not?). The confusion is caused by two co-existing factors: [1] people can, in fact, make themselves weigh more through inappropriate food consumption and lack of exercise, and [2] some people are, in fact, simply heavier than others (in the same way some people are taller than others, to continue that analogy). Add to the equation the $46 billion spent annually in the United States alone selling products and services to convince all non thin people to get thin now, and Factor #2 gets completely lost. In fact, people stop believing it could possibly be true. Focus on nutrition, portion size, physical activity, and generally healthy living - yes. But don't presume that only thin people understand and live these concepts.

    • Second, if it were a simple matter of control, two-thirds of Americans would not be overweight. Does this reader genuinely think that nearly 70% of the people in this country have no control? Moreover, does this reader think that those 70% of people enjoy being repeatedly attacked by the rampant fat-bashing that has become standard in the epidemic-proportion obesity panic of the past few years? If all it took to lose weight was being made to feel ashamed, everyone would be thin. It's simply not that easy.

    • Third, the comparison of size to second-hand smoke is a complete non-sequitur. Someone standing next to a fat person cannot "catch" obesity. Smoke, on the other hand, can easily fill up the lungs of everyone in the area. I sense that this (anonymous) reader is a smoker who is sick of being picked on, and is hoping to deflect criticism from him/herself to the ever-increasing number of fat people in the country (who are already a huge target, pardon the pun).

    • Fourth, for all the hoopla over health care costs, nobody seems to mention that fat people pay into the system, too. Insurance premiums, co-pays, medical bills, prescriptions, the works. Do they think that the fat people are getting free services while the thin folks fork over the cash for it?

    MNB user Mark DiNovo wrote:

    I think this whole "fat" thing points to a larger problem in our society. Quite simply, as a nation, we lack self discipline. Instead of working to better ourselves, we just want to lower the bar. Obviously, this isn't true for all of us, however the facts cannot be ignored. Look at the figures for obesity in children. For those of us in our mid to late 30's or older, how many of us can actually remember so many "fat" kids. Why? Quite honestly, we didn't live such a sedentary life style. We didn't have the video games (at least I didn't). Which meant we actually played football, not Madden 2005 for hours a day.

    In the final analysis, we have become slaves to our own "convenience" based lifestyle. But, in our defense, as a nation, we live very stressed out lives in order to purchase all the stuff we are told we need in order to be happy. The real solution is to simplify our lives. What we need to understand is that a simple life does not mean an easy life.

    In fact, just the opposite is usually true. We need to answer the question to ourselves, do we want convenience or do we want freedom, true freedom?

    Martha Stewart told Fortune the other day that she at one point considered buying Kmart, and now thinks that she “really cannot be destroyed.” To which one MNB user responded directly to her:

    As every humble business person knows, there is a time to be quiet and count your blessings. I would think a women of your age and stature would understand such a life lesson.

    Apparently not, what a shame.
    KC's View: