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    Published on: February 3, 2006

    PARIS – Something interesting is happening here at the fifth annual CIES International Food Safety Conference.

    We started off talking about food safety. But somehow, we veered into a broader discussion that included obesity and nutrition.

    For some people here, though, this hardly takes the conference off track, but rather expands it to include different elements of the same discussion, elements that at least some people need to be included together in any frank discussion of the safety issue.

    Here’s how the thinking goes, according to Alfons Schmid, vice president of food safety and consumer affairs at Royal Ahold. Since food safety initiatives are concerned with making sure that the food that people eat won’t hurt them, isn’t it logical to also make sure that the food they eat isn’t served in too-large quantities, and does not have too much fat, salt, etc…?

    “It is a more holistic approach to food safety,” Schmid said, noting that he intends to take a leadership role in getting other CIES member companies to adopt the same strategy.

    In other words, food safety needs to be more broadly defined as human safety.

    It was, in fact, a strategy tacitly endorsed by Paola Testori-Coggi, director of food safety and health & consumer protection for the European Commission. In an address to the conference, she suggested that the same infrastructure that has been built to deal with food safety issues could be easily adapted to address obesity concerns.

    This approach, to be sure, is not universally sanctioned. We spoke to a number of delegates to the conference – both European and American – who felt that such an holistic approach to food safety might actually have the effect of taking the main mission off course.

    What struck us about this approach, however, is that it seems in synch with some of the research done by the Hartman Group. In the video produced by MNB and being shown at the conference this afternoon, Hartman COO Laurie Demeritt says the following about consumer behavior:

    “Consumers give a lot of lip service about spending a lot of time reading labels but when we actually are with them what we’re finding is that they’re just looking in most cases for one or two things on the label and it doesn’t have anything to do with food safety in most cases. They have to do with avoiding certain ingredients like sugar or looking for ingredients they want like protein. And so they define that as label reading but in most cases it’s a very cursory two to three second look at the label and very infrequently does it have anything to do with food safety. Food safety in the consumers’ mind concerns things that are free of which we can speak to more contaminants, bacteria, whatnot clean or are properly processed in the words of the consumer and those are things they don’t necessarily look at on the label. It’s things they already believe about the product or believe the retailers taking care for them.”

    In essence, this means that consumers may be defining food safety both more narrowly and more broadly than the industry does.

    In the end, this is something that food manufacturers and retailers need to know, and probably need to consider as they develop strategies and initiatives dealing with both food safety and nutrition/obesity issues. At the very least, this holistic and inclusive approach needs to be the subject of open and considered debate both in the US and elsewhere in the world.
    KC's View:

    Published on: February 3, 2006

    Published reports say that bankrupt Winn-Dixie has gone back to the court that is overseeing its financial affairs to request that it be allowed to scale back the retention bonus it wants to pay CEO Peter Lynch – from $2 million, which was rejected by a creditor committee, to $1.15 million, a figure that the committee reportedly approves of.

    The bonus would be paid so that Lynch will remain as CEO through the end of August this year; he’d have to pay it back if he were to leave before that time.

    Lynch already got a $1.5 million retention bonus in 2005.
    KC's View:
    We still think this is a crock.

    How many couldn’t put up with seven months in just about any job for $1.15 million? The only reason he’d leave would be to take a job that would pay him significantly more, which makes the deadline sort of a moot point.

    Pay him an enormous bonus after the company gets out of bankruptcy protection and can be considered a legitimate and viable competitor in the marketplace. Pay him a bonus for finishing the job, not for sticking around for the next 200-plus days.

    Ironically, this new request comes even as Winn-Dixie has acknowledged that when it emerges from Chapter 11 protection, probably later this year, it is “relatively clear” that there will be no “meaningful recovery” by existing shareholders of money lost on the company to this point.

    Don’t these folks know any shame?

    We like what Steve Jobs did at Apple Computer. When he returned to the company in 1997 after a long exile, he took a CEO salary of $1 a year…which he has augmented over the years with numerous bonuses and stock options as he has rebuilt the company into being the enormous success that it is today. But they were rewards, not a way of keeping him around.

    That’s the kind of leader we’d follow into battle.

    Published on: February 3, 2006

    The Wall Street Journal reports that the United States Government is looking for a piece of the action in the $3 billion settlement being paid by MasterCard and Visa in a case involving debit card fees.

    “The antitrust division of the Justice Department submitted a claim late Friday that is estimated to be valued at $100 million, surpassing the $80 million that Wal-Mart Stores Inc., the lead plaintiff in the lawsuit, is estimated to collect from the 2003 settlement.

    “By filing a claim, the government is essentially contending that it -- like the nation's retailers -- suffered as a result of Visa and MasterCard's rules. That policy required merchants to accept Visa and MasterCard branded debit cards if they also accepted credit cards branded with their logos. The government racks up millions of debit card transactions each year as consumers use plastic to buy everything from stamps to souvenirs at the Smithsonian Institution's museums and cigarettes on military bases.”

    The retailers may not be sanguine about the government’s claim, however. The WSJ reports that to Lloyd Constantine, the lawyer who represented the retailers in the lawsuit that resulted in the settlement, has petitioned the court, saying that there was “a serious question” about whether the government should be allowed to get its hands on any of the money.
    KC's View:
    We imagine that the retailers might have some strong opinions about the federal government swooping in at the last minute to try and siphon off some of the settlement money. After all, the government wasn't a party to the case, so it seems a little disingenuous to try and get the biggest piece of the pie.

    On the other hand, we’d personally be willing to let the government have the money – as long as we knew what it planned to do with it. A little deficit reduction would be nice, for example. Or maybe they could put it toward cleaning up after Hurricane Katrina. Or perhaps toward creating more and better hospital and rehab facilities for wounded soldiers coming back from Iraq.

    But if they’re planning on using the money, say, to finance a renovation of the Senate gym…well, we’d object to that.

    Just tell the taxpayers what the money is for. Specifically.

    Published on: February 3, 2006

    The New York Times reports on a new study, conducted in Denmark, suggesting that wine drinkers are healthier than beer drinkers – not so much because of their choice of libation, but because of what they eat while drinking.

    The study “found that shoppers who bought wine in supermarkets were much more likely to buy healthy foods like olives and low-fat cheese than were beer buyers, who were more partial to things like chips,” the Times reports, noting that various studies “have linked a moderate amount of alcohol use with better health, and this is especially true when it comes to wine, which has components that may help prevent cancer and cardiovascular disease.

    “Still, it is possible that whatever health benefits wine drinkers enjoy actually result from overall better diets, some studies have suggested.”

    The Times also writes that that there are other reasons wine drinkers may be healthier than beer drinkers: “Wine tends to be drunk with food, and in smaller amounts…possibly affecting how the body metabolizes it. And wine drinkers tend to be better educated and better off financially than beer drinkers, factors that would also help account for their better health.”
    KC's View:
    So this means that if the beer companies can only get people to buy olives and low-fat cheese with their beers, instead of chips, then their sales problems may be reversed.

    Good luck.

    Published on: February 3, 2006

    Advertising Age reports that Coca-Cola is in trouble with the nation’s truckers over a not-yet-aired television commercial for its new Full Throttle energy drink. The ad is supposed to air before Sunday’s Super Bowl, but the American Trucking Association is engineering a letter writing campaign to derail its broadcast.

    The truckers apparently object to the stereotypical portrayal of their kind as overly aggressive bullies who drive too fast and put smaller vehicles and their drivers in peril.
    KC's View:
    We’re shocked by this callous portrayal of the gentle, compassionate and exceedingly polite breed of men known as truckers by those awful folks at the Coca-Cola Co. Driving our little sports car on the open highway, we’ve certainly never had the experience, say, of having some enormous truck ride right up behind us and then blast the horn because 65 or 70 miles an hour just isn’t fast enough for them. We don’t know where these horrible stereotypes come from.

    You’d think that the people at Coke would be more sensitive, since Ad Age also reports that truckers are major consumers of energy drinks, and they clearly manage to down the stuff without ever letting such beverages ramp up their more aggressive tendencies.

    Some will say that these truckers have a thin skin, that they cannot take a joke. But not us. We think they are all fine and upstanding drivers, respectful of others and always precise about obeying the rules of the road.

    Published on: February 3, 2006

    The Orlando Sentinel has an interesting interview with chicken maven Jim Perdue, chairman of Perdue Farms, in which he says that “less-deadly strains of bird flu circulate all the time among birds and fowl, but public fears of the killer strain now in Asia and Eastern Europe will test the multibillion-dollar U.S. poultry industry when a milder version crops up on farms here. Perdue said that such an occurrence is almost inevitable, but that it is likely to be a milder version than the one overseas.

    The Sentinel notes that “the National Chicken Council, representing companies such as Perdue Farms, recently announced that members will voluntarily test all chicken flocks before slaughter. Perdue said he supports ‘100 percent testing’ and in fact the company has been doing that on its own in recent years.”

    Despite these precautions, however, Perdue said that Sales could drop “based on unjustified fears of a health threat, and that would require an effective and prompt consumer-education campaign.”
    KC's View:
    One-hundred percent testing for chickens?

    To paraphrase Chico Marx, why a chicken? Why a no cows?

    And the thing is, it is harder to catch chickens. They’re small, and they run around a lot.

    The only negative thing we can see in this story is the suggestion that it is inevitable that some sort of low-grade avian flu will hit the US. We hear that, and it always sort of sounds like the groundwork is being laid for an announcement that is much, much worse.

    Ah, well.

    As Chico’s brother Groucho once said: “A child of five would understand this. Send someone to fetch a child of five.”

    Published on: February 3, 2006

    The monthly Future Spending Index released by Retail Forward is at 99.6 for February, almost equal to what was considered a “buoyant” figure of 99.7 during January.

    "Shoppers remain undaunted largely because of better cash flow this month across each of the key income segments," says Steve Spiwak, an economist with Retail Forward. "This is being offset somewhat by the downtrend in home buying since autumn, which will discourage spending primarily on homegoods. Still, the near-term environment remains favorable for the retail sector as a whole."

    However, the Valentine’s Day holiday isn’t expected to be a major factor in the month’s economic performance, with shoppers telling Retail Forward that they would the same as last year or nothing on their loved ones this year – offering something of a contrast to a report by the National Retail Federation (NRF), which said that the average consumer will spend $100.89 on Valentine's Day, up slightly from $97.27 last year.
    KC's View:
    Here’s the thing that we don’t understand. We haven’t decided what we’re giving Mrs. Content Guy for Valentine’s Day this year, much less what we’re going to spend on it. So how do these guys know?

    Pretty spooky, if you ask us…

    Published on: February 3, 2006

    The New York Times reports that the city’s public school system has decided to eliminate whole milk from its lunch program as a way of improving nutrition for the 1.1 million children who attend the city’s schools.

    “That feat, no small one in a system that serves a half-million half pints of milk a day, is already under way, with whole milk banished from cafeterias in the Bronx and in Manhattan,” the Times writes. “To the ire of the dairy industry, which has lobbied fiercely against the change, the other boroughs are following suit and, by the end of this month, officials say, whole milk will be gone for good.

    “One percent and skim milk, though historically less popular, will still be served, and, to the great relief of many young palates, chocolate skim milk will remain an option in most schools, despite the misgivings of some doctors and nutritionists. In the Bronx, where local health advocates led the charge to expel whole milk from the school system, some schools are offering chocolate milk only one day a week.”

    This is just the latest move by officials on the school nutrition front. White bread already has been banned in favor of whole wheat.

    KC's View:

    Published on: February 3, 2006

    • ConAgra Foods announced that it will sell most of its refrigerated meats business, including the Armour, Butterball and Eckrich brands. A likely suitor is thought to be Sara Lee Corp., which is not commenting on the possibility.

    • Nearly 300 retail industry executives, store owners, law enforcement personnel, lawmakers and prosecutors met yesterday in Los Angeles in an effort to curb the $34 billion problem of Organized Retail Theft (ORT).

    The one-day seminar, co-hosted by the California Grocers Association (CGA) and the California Retailers Association (CRA), examined the ORT crisis and how it impacts retail industry and law enforcement. Speakers included retailers, law enforcement and local district attorneys who provided information on how theft rings operate and what retailers and law enforcement can do to deter their activities.

    CGA and CRA are exploring legislative and regulatory solutions to this escalating security problem, which reportedly is the cause of more than $34 billion in annual losses on a national basis.
    KC's View:

    Published on: February 3, 2006

    • Target Corp. reported that its January sales rose 14.1 percent to $3.57 billion, compared to the same period a year ago with same-store sales up 5.2 percent.

    • Costco Wholesale Corp. said that its January sales rose 12 percent to $4.12 billion, on same-store sales that were up nine percent.

    • BJ’s Wholesale Club reported that its January sales 5.6 percent to $524 million, but same-store sales were up only a disappointing two percent. Food sales were up two percent, while general merchandise sales fell three percent.

    • CVS reported that its fourth quarter net income rose almost 60 percent to $406.4 million, from $251.1 million a year earlier. Sales rose nine percent to $9.73 billion from $8.92 billion. Same-store sales rose 6.7 percent during the quarter.

    • Anheuser-Busch reported fourth quarter earnings of $201 million, for the period ended Dec. 31, down from $332 million, or 42 cents, a year earlier.

    Sales were flat in the final quarter of last year, with gross revenue rising to $3.882 billion from $3.88 billion the previous year.

    • Longs Drug Stores reported that its January sales grew 7.4 percent to $360.5 million, compared with $335.6 million a year ago. Same-store sales were up 2.2 percent.

    • Rite Aid Corp. reported that its January sales slipped 0.5 percent to $1.26 billion, with same-store sales up 0.9 percent.

    • Walgreen Co. reported that its January sales rose 11.8 percent to $3.88 billion, on same-store sales that were up 7.4 percent.

    • reported a 43 percent drop in profit for the fourth quarter, blaming it on reduced tax benefits compared to the same period a year ago. Quarterly profit at Amazon was $199 million, compared to $346.7 million in the year-earlier period. Q4 sales rose 17 percent, to $2.98 billion, from $2.54 billion a year ago.

    For the year, Amazon's sales grew 23 percent, to $8.49 billion, while profit declined to $359 million, from $588 million.
    KC's View:

    Published on: February 3, 2006

    • Walgreen Co. has promoted its store operations vice president, William M. Handal, to be senior vice president of eastern store operations. He succeeds Mark A. Wagner, who was previously named executive vice president of store operations.
    KC's View:

    Published on: February 3, 2006

    …will return. Next week. We promise.

    (No time to read the emails. You’ll understand when you read OffBeat, below…)
    KC's View:

    Published on: February 3, 2006

    So there I was last night.

    In Paris.

    At a reception on a glassed-in boat moving slowly along the Seine River.

    Sipping champagne and eating stuff that I had no idea what it was, except that I’m pretty sure some of it was caviar.

    Watching sparkling, diamond-like lights flash across the surface of the Eiffel Tower, its spire reaching up into the fog.

    And I had a grin on my face that wouldn’t go away, as I wondered what exactly I did right in my life to land me in such a place having such a good time.

    The food and the wine were fantastic, the conversations with industry folks attending the CIES International Food Safety Conference were unusually long and frank, and the entire evening was like something out of a dream.


    Nobody is supposed to be this lucky.

    Two nights ago, at a dinner sponsored by CIES, I realized another reason I love the French.

    They served cheesecake.

    As an appetizer.

    Be still my heart.

    Remarkably, with all this food and drink, the servings are small enough and spaced out far enough that you never get full, never feel remotely stuffed.

    Just very, very pleasant. And in a good mood that won’t go away.

    Tomorrow, if all works out, I plan to take a walking tour of Paris themed to the events that take place in “The DaVinci Code.”

    It’s good being me.

    Actually, it has been a pretty unusual week for eating and drinking.

    Here’s a confession that most people won’t make, at least not in print.

    Early this week, in San Diego for the FMI Marketechnics Conference, retailer Marv Imus and I went to the Gaslamp Strip Club and had a Menage A Trois.

    (Betcha that got your attention…)

    Actually, the Gaslamp Strip Club is a steak joint in San Diego’s Gaslamp District that allows you to cook your own steaks. I had an excellent skirt steak that had been marinated in ale and chopped garlic and then topped with Cajun spices. Not exactly French cuisine, but yummm…..

    And the Menage A Trois? That was a very nice 2004 red wine from Napa’s Folie A Deux winery, a rich blend of Cabernet, Merlot and Zinfandel.

    Is this a great job or what?

    Have a great weekend. I’ll drink a toast to all of you…and I’ll see you on Monday morning.

    À votre santé!!
    KC's View: