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    Published on: September 5, 2006

    Prevention Guides are focused, authoritative, single-topic issues covering health, weight loss, fitness and recipes in a convenient, digest-size format.

    Prevention Guide - Slow Cooker: For consumers seeking great taste with great nutrition; Slow Cooker recipes for meals, side dishes, and desserts; all recipes are low in fat and calories.

    For more information about Prevention Guides, Rodale and its compelling roster of magazines that speak directly to your consumers, please e-mail: Dick.TerlaakPoot@Rodale.com.
    KC's View:

    Published on: September 5, 2006

    Looking for a sure-fire recipe to differentiate your produce department from the next guy’s?

    Pro-Health Potatoes are healthier and plumper than the average potato, because we grow the majority of our potatoes on virgin soil. Pro-Health Potatoes offer shoppers consistent sizing and consistent quality – and, by moving beyond a commodity-based approach to this category, Pro-Health offers retailers the ability to differentiate their produce departments by addressing the twin issues of health and convenience.

    And now, exclusively for MNB users from Pro-Health Potatoes – recipes that you can use for in-store fresh food offerings, or that you can offer to your shoppers for at-home use.

    Just send an email to Alan Bradshaw - alanbradshaw@pro-health.net - and write “Recipes” in the subject line, and we’ll shoot you back some dynamite recipes that are proven winners.

    And, for more information about Pro-Health Potatoes, go to: http://www.pro-health.net/

    Pro-Health Potatoes: The Official Potato Of MorningNewsBeat.com!
    KC's View:

    Published on: September 5, 2006

    Garden of Life is a leading nutrition and dietary supplement company committed to providing whole food based products to health conscience consumers.

    Our new Organic Living Foods™ Bars are all natural, made with LIVE Probiotics, 100% vegetarian, made with raw ingredients, containing no fillers or artificial colors, and dairy free.

    Three varieties:

    • Fruits of Life™ Bar - 6 organic fruits provide antioxidant activity equal to 4 servings of fruits and vegetables
    • Super Seed® Bar - 18 sprouted grains and nuts providing 6 grams of fiber
    • Perfect Food® Greens Bar - 21 organic vegetables and 5 grams of fiber

    For more information, go to: http://www.gardenoflife.com/detail_food_bars_retail.shtml
    KC's View:

    Published on: September 5, 2006

    The cold weather is coming and fuel prices are on the rise…which means that people will be using their fireplaces more than ever as they look for an economical and effective way to heat their homes.

    Wood Products International’s Fatwood Firestarter is a cost-effective and non-toxic way to help your customers, creating a longer-lasting fire…which is just what the customer wants during the coming winter months.

    For information about how to bring Fatwood Firestarters to your customers, go now to: http://fatwood.com/

    Fatwood Firestarters – Used All Winter In the MNB Home Office!
    KC's View:

    Published on: September 5, 2006

    Today’s customers have more choices than ever and few retailers can claim that their customers are exclusive to them. But TCC Retail Marketing specializes in designing programs that change customer behavior:

    • Giving customers a worthwhile reason to shop your stores more frequently and spend more of their grocery budget with you.

    • Influencing your competitors’ high spending customers to switch to your stores.

    • Creating sales increases between 4% and 5% over a 4 to 6 month period.


    Operating in more than 50 countries, TCC has worked with 30 of the world’s top 50 grocery retailers to increase sales, profitably – running more than 4,000 programs with many of the world’s major retailers, including Tesco, Carrefour, Casino, 7-Eleven, Metro, Tenglemann, Spar, Rewe, Exxon, BP and Shell.

    For more information, please contact:

    Americas: Gordon Cooper - gordon.cooper@contco.com

    Europe: Mark Featherstone - mark.featherstone@contco.com

    Asia: Richard Beattie - richard.beattie@contco.com
    KC's View:

    Published on: September 5, 2006

    A new presentation from Kevin Coupe, “Content Guy,” MorningNewsBeat.com

    What kind of company do you want to lead? What kind of leadership do you want to demonstrate? And how will you differentiate your products and services in an era of cutthroat competition?

    These are among the issues that Kevin Coupe, MorningNewsBeat’s “Content Guy,” addresses each day on his website…and they are the focus of a new presentation he is creating for 2007 audiences. His premise: the stakes are too high, the time is too short, and the customer is too demanding for retailers and manufacturers to put off critical decisions that will define their futures and their hopes for survival.

    Want to book Kevin for your 2007 conference or convention? It’s easy – just call 203-662-0100, or email: kc@morningnewsbeat.com .

    COUPE COMMUNICATIONS
    Where Big Ideas Mean Business

    KC's View:

    Published on: September 5, 2006

    The hostility aimed at big box stores in the US has now found voice in the form of a new piece of legislation in California that would require local governments to consider an economic impact report before approving the building of any so-called big box store larger than 100,000 square feet. The bill has been approved by the legislature and sent to Gov. Arnold Schwarzenegger for his signature.

    Another bill sent to the governor bill would require retailers that challenge local zoning regulations to pay all of communities' legal fees if they are unsuccessful in their challenges.

    Schwarzenegger, who is running for reelection this year, has not taken a public position on either of these bills.

    While the bills, if signed into law, would affect all big box stores, Wal-Mart is perceived as being the major target of the bills’ supporters. Not surprisingly, Wal-Mart opposes both bills, and has gone on record as saying that Schwarzenegger should veto them because they would result in restricted consumer choice – an opinion that has been seconded by a number of business groups and Republican lawmakers.
    KC's View:
    We actually think that any local government that does not require an economic impact statement when any major business development is proposed is guilty of dereliction of duty. Doesn’t it make sense that all proposals ought to be seen within the context of how they will affect the community – for better and for worse – before they are approved?

    We don’t know what the Governator is thinking these days, but it certainly has seemed lately like the exigencies of the political campaign are forcing him to act more like a Democrat than a Republican…which means that his signature is likely to be seen on these two pieces of legislation.

    Published on: September 5, 2006

    The Los Angeles Times reports that organic advocates are upset with proposed changes in labeling regulations that would change the definition of “grass-fed beef.”

    According to the story, the US Department of Agriculture (USDA) wants to change the definition so that “only 99% — rather than 100% — of a cow's diet come from grass forage, and by defining forage more broadly to include things such as corn stalks left over from harvests and silage, which is fermented grasses and legumes.” The rationale for the change, the Times writes, is that the current rules penalize geographic areas of the country where cows cannot graze outside full time.

    Critics argue that “grass fed” ought to mean “grass-fed,” and that there should be no room in the definition for compromise; if the definition is changed, they say, “it would let more conventional ranchers slap a grass-fed label on their beef, too.”

    Grass-fed beef is leaner and more expensive; it also appeals to people who want to avoid beef that has been fed antibiotics.

    The Times writes: “All beef cattle graze on grass at the beginning of their lives. The difference generally is that cattle later characterized as grass-fed beef graze in pastures, while conventional cattle spend the last three or four months of their lives being fattened with corn or other grains in feedlots.”
    KC's View:
    We agree with the folks who believe that “grass fed” ought to mean “grass-fed.” It is the reduction of standards that slowly erode the notion of quality in our society; when government or other institutions say that standards ought to be eased because they are inconvenient or too exacting, it suggests to us that the people making the proposal don’t know the meaning of the word “standards.”

    As for the geography argument…what a crock.

    Using this rationale, we should be able to grow grapes in our backyard, make wine in our bathtub, and then not be prohibited from calling it Napa Valley wine…simply because we shouldn’t be penalized for living in Connecticut and not Napa.

    Published on: September 5, 2006

    Consumer Reports says in its annual rating of the nation’s supermarkets that the best chains in the country are Wegmans Food Markets, Trader Joe's, Publix Super Markets, Raley's, and Whole Foods Market. The five achieved their rating by getting high marks in service, quality of perishables, price and cleanliness.

    Next on the list were Harris Teeter, Costco, Lowe’s Foods, Hy-Vee and Stater Bros.

    According to the story, the lowest prices on food can be found at Costco, Sam’s Club, and Wal-Mart.

    Consumer Reports also says that shoppers’ main complaints include closed checkouts, congested aisles and out-of-stock specials – though most remain generally happy with their supermarket shopping experiences.
    KC's View:
    It isn’t just a coincidence that the chains that made the list have highly specific identities and connections to the communities they serve.

    Published on: September 5, 2006

    The Wall Street Journal reports that Subway Restaurants is achieving significant growth by “increasingly moving into locations where rivals have feared - or neglected -- to tread. In the past several years, Subway has opened inside a church in upstate New York, a handful of coin-operated laundries in California, a Goodwill Industries store in South Carolina, a car dealership in Germany and an appliance store in Venezuela. It has more than 110 restaurants inside hospitals.”

    Subway seems to be far ahead of all its fast food competition in working this strategy. “Subway, with a menu anchored by cold cuts, has an easier time opening in unorthodox spots because it has a simpler kitchen than traditional fast-food restaurants that require frying and grilling equipment,” according to the Journal. “And Subway has edged out hamburger chains and doughnut shops at hospitals and religious facilities partly because it promotes its sandwiches as a fresher, healthier alternative to traditional fast-food.”
    KC's View:
    Smart marketing. A “build it and they will come” approach to retailing simply is old school. In the new world order, you have to find new ways to appeal and reach out to consumers where they are.

    Published on: September 5, 2006

    The Wall Street Journal reports on a study issued by the US Centers for Disease Control and Prevention (CDC) saying that about 50 percent of advertisements for alcoholic beverages on the radio are broadcast during youth-oriented programs. It was just three years ago that the alcohol industry pledged not to run ads on any program for which 30 percent or more of the audience is under 21 years of age.

    However, representatives of the alcohol industry disputed the CDC findings, saying that the numbers were inaccurate and that they didn’t take into account advertising contracts that had not expired.
    KC's View:
    The legal drinking age in the US is 21. There is no excuse for advertising alcoholic products to people under 21. None.

    Unexpired advertising contracts be damned.

    Don’t these people realize that they have a responsibility to someone other than their shareholders?

    Published on: September 5, 2006

    Fascinating piece in Business Week about a battle taking place now between Wal-Mart and Apple Computer, a battle that has had the company confronting Hollywood’s studios over the possibility that they may make their films available to consumers via its iTunes online music and video store.

    The problem for Wal-Mart is that the online purchase of movies could erode its sale of DVD sales – and Wal-Mart currently accounts for four out of every ten dollars spent on DVDs in the US. (About $17 billion in DVDs are expected to be sold this year.)

    According to the magazine, “Skittish executives have for months delayed giving (Apple CEO Steve) Jobs the rights to distribute their movies through his new service. The price Apple hopes to charge, now set at $14.99 for new releases and $9.99 for older movies, has risen from Jobs's initial plan to offer new flicks for $9.99, say industry insiders. So far, Apple only has one studio signed on: Walt Disney, where Jobs is the largest shareholder following the entertainment giant's purchase of his Pixar Animation Studios.”

    Wal-Mart reportedly wants the studios to delay making their films available over the Internet until it has its own download site ready, and also would like to see the wholesale price of DVDs reduced so it can lower its costs and prices.

    The irony of this battle is that Wal-Mart has a relationship with Apple Computer – many of its stores sell the very iPods and computers that would be used to play the downloaded movies.
    KC's View:
    If Wal-Mart thinks it can delay the inevitable move to downloading movies – as opposed to buying or renting DVDs – then it is sadly mistaken. And asking the movie studios to wait until it has caught up with Apple’s elegant approach to downloading media strikes us as inappropriate and driven by its own interests and not the consumer’s.

    By the way, let’s not forget that Wal-Mart also tried to do battle with Netflix and its online rental business model by imitating it…and then had to surrender because it couldn’t compete, and ended up outsourcing the business to Netflix.

    Published on: September 5, 2006

    London’s Sunday Times has an interesting piece about how Tesco did market research before deciding to open so-called convenience stores in the United States:

    “For two weeks, 50 senior Tesco directors and researchers lived the American dream: shopping, eating and even ‘chilling out’ with families living on the West Coast.

    “Their mission: to understand the American way and how best to exploit it.

    “The Californian families — who were recruited by a market-research firm — had no idea who the strange Brits were or why they were so interested in how they lived. Nevertheless, they invited them into their homes where over the next fortnight the visitors kept a diary detailing their hosts’ eating habits, shopping routines, even excursions for recreation or entertainment.”

    In addition, “Tesco’s US research did not stop at just shopping with consumers. In east Santa Monica, away from the beaches and tourists, Tesco constructed a dummy store within a warehouse” – and then pretended that the store was a film set.
    KC's View:
    Based on a number of stories that we’ve done on Tesco over the years, including interviews with both the former chairman Sir Ian MacLaurin and current chairman Sir Terry Leahy, we’ve believed all along that the company’s US stores will be modeled on but will not replicate its Tesco Express convenience stores in the UK – and that they will redefine the notion of what a convenience store is,.

    The Times suggests that this is true – that while Tesco’s Express stores tend to be about 3,000 square feet, its California stores are likely to be between 10,000 and 12,000 sq ft, with parking for 70 cars and with a local population of at least 15,000 people.

    Seems pretty big for a c-store. We think this is going to be a break-the-mold kind of store, and we can’t wait.

    Published on: September 5, 2006

    The Conference Board reports that its Consumer Confidence Index fell 7.4 points in August to 99.6, the lowest number since last November and the biggest drop since September 2005, right after Hurricane Katrina decimated the Gulf Coast.

    The number of consumers who said “jobs were not so plentiful” reached 54.5 percent, the highest percentage since November 2005.

    Lynn Franco, director of The Conference Board Consumer Research Center, said that consumers seem to believe that the glass is half-empty rather than half-full.
    KC's View:

    Published on: September 5, 2006

    The Cincinnati Business Courier reports that Kroger Co. will sell 11 stores in San Francisco operated under the Cala Foods and Bells Markets banners to Harley DeLano of DeLano Retail Partners, described as “a local supermarket veteran,” and a previous president of Cala Foods.

    Terms of the deal were not disclosed.
    KC's View:

    Published on: September 5, 2006

    • The Associated Press reports this morning that Wal-Mart has submitted a bid to acquire a percentage of Daiei, the Japanese retailers, which would allow that troubled company to rehabilitate itself. A rival bid reportedly has been made by Aeon, another Japanese retailer.

    Wal-Mart already has one Japanese subsidiary, Seiyu, in which it first invested in 2002 and gradually increased its stake until it owned a majority of the company at 53 percent.

    • Wal-Mart announced that it has begun selling ten fish products carrying the Marine Stewardship Council's (MSC) independent blue eco-label, which signifies that the seafood was caught from fisheries designated as offering sustainable products.
    KC's View:

    Published on: September 5, 2006

    • The Los Angeles Times reports that Trader Joe’s has been a big hit with its first store in New York City, where its discount prices on exotic foods have proven a real draw – especially to people who might find the Whole Foods Market down the street a little bit pricey. Speculation is that the Trader Joe’s just off Union Square may be one of the highest volume stores in the 256-unit company fleet.

    • In Ireland, Tesco announced that it will cut prices on some 5,000 items for which prices previously controlled by the Groceries Order prohibiting below-cost selling. This doubles the number of items on which prices have been cut to 10,000, with Tesco saying that the average reduction on the items is about 4.7 percent.

    However, Ireland’s Director of Consumer Affairs, Ann Fitzgerald, says that despite the abolition of the Groceries Order, widespread price competition that would have benefited Irish consumers has not broken out.
    KC's View:

    Published on: September 5, 2006

    • BJ’s Wholesale Club reported that its August sales were up 4,4 percent to $624.7 million, with same-store sales up 2.3 percent.

    • Dollar General reported second quarter sales of $2.25 billion, up nine percent from the same period a year ago, with same-store sales up 3.2 percent. Net income for the period was $45.5 million, down from $75.6 million a year ago.

    • Longs Drug Stores reports that its August sales reached $381.3 million, a 9.6 percent increase from total revenues of $347.8 million in the comparable period a year ago.
    KC's View:

    Published on: September 5, 2006

    • Meijer announced that its co-CEO, Paul Boyer, will retire from his position at the end of the year while remaining on the board as vice chairman. Hank Meijer will continue as the company’s CEO after Boyer’s retirement.
    KC's View:

    Published on: September 5, 2006

    Sometimes you go on vacation, and not much happens. Sometimes you go on vacation, and suddenly Pluto isn’t a planet anymore…and Wal-Mart embraces the gay and lesbian community. (Which of these events is more momentous sort of depends on your point of view. But we’re pretty sure that the occurrence of both things in one week suggests that, indeed, hell has frozen over.)

    Just as a recap, here’s some of what happened while we were on holiday…with some brief commentary in italics:

    • There were numerous stories over the past few weeks about how Wal-Mart seemed to be taking a new approach to business and politics.

    The Wall Street Journal, for example, reported that Wal-Mart “is wooing some core Democratic constituencies as part of a strategy to fend off another round of election-season attacks from labor unions and politicians.

    “In particular, the retail giant is giving to African-American and Hispanic lawmakers on the theory that many of their constituents are satisfied Wal-Mart shoppers and workers. More than 10% of the company's 1.4 million U.S. workforce is Latino and more than 16% is African-American.”

    At the same time, Wal-Mart has joined Wal-Mart Stores has joined the National Gay & Lesbian Chamber of Commerce, hired a gay-marketing firm, and is even in discussions about extending domestic-partnership benefits to its employees.

    Meanwhile, the Los Angeles Times reported that “as the world's largest retailer tries to reach out to more diverse shoppers in its bid to keep expanding beyond its rural and Southern roots, it risks alienating loyal and long-standing patrons.”

    So-called “pro family” organizations such as the American Family Association characterized the decision as rejecting the legacy of founder Sam Walton, and said that it showed the company was more interested in profits and stock prices than in traditional values. And even some members of the gay and lesbian community argued that the National Gay & Lesbian Chamber of Commerce was being hypocritical by doing business with a company with which it disagrees on many issues.

    The retailer also reportedly is hiring Democratic Party-affiliated lobbying and public relations firms to represent its interests, even as it changes its health care benefits policies in the hope that it will make the company’s culture more palatable to a broader range of people.

    Company CEO Lee Scott has hosted dinners for both the Congressional Black and Hispanic Caucuses. According to the WSJ, “Ten years ago, 98% of Wal-Mart's political donations went to Republicans. Now, 70% go to Republicans, who control Congress and the White House, and 30% to Democrats.”

    In addition to all these moves, Wal-Mart also has been making a lot of noise on the environmental front, working to cut pollution generated by its stores and vehicles and even going so far to invite former vice president Al Gore to its Bentonville headquarters to talk about global warming…and then gave him, no pun intended, a warm reception.

    There are a couple of different ways to read this, in our opinion. Some people seem to think that Wal-Mart is becoming more inclusive in its approach, while others think that it is trying to create fissures in traditionally Democratic constituencies.

    We think it means that Wal-Mart has read the tea leaves, and realizes that everything is cyclical…and that, just maybe, the country’s conservative bent of the past quarter-century may be moderating somewhat. We’re not sure that it means liberalism will suddenly be in vogue, but everything changes over time and the pendulum swings and consumer attitudes shift.

    Wal-Mart isn’t stupid. Consumer attitudes are an irresistible force, and when it runs into an immovable object, it isn’t good for anyone…including the immovable object.



    • The Democratic Party-controlled California State Legislature last week passed the California Global Warming Solutions Act, which requires major industrial producers of such gases to reduce emissions 25 percent by 2020, and makes California the first state to tackle global warming by forcing caps on carbon dioxide and other gases. The bill is supported by Republican Gov. Arnold Schwarzenegger.

    In an opinion piece run by Time this week, John Doerr, a founder of the Greentech Network and a venture capitalist at Kleiner Perkins Caufield & Byers, wrote:

    “The economic benefits are large and calculable. In California, the world's sixth largest economy, the Climate Action Team determined that global-warming reduction would increase income by more than $4 billion while providing 83,000 new jobs. Growth will come from several sources: innovative green technologies will create high-quality jobs and new revenue streams. In addition, companies will have increased purchasing power once they decrease energy costs and reduce imports of fossil fuels. The notion that businesses will leave the state is flawed because all suppliers that sell to California are affected, not only California-based suppliers. The doomsayers just don't get it: we can harmonize economic growth and environmental benefits.”

    However, not everybody agrees.

    A coalition called Sustainable Environment and Economy for California (SEE California) – of which the California Grocers Association (CGA) is a member – maintains that the law is a big risk to the state’s economy while providing little benefit for the environment. In a letter to the California State Senate, SEE California wrote that the bill “increases costs for California businesses, makes them less competitive, an discourages economic growth with little or no proven environmental benefit by adopting an arbitrary cap on carbon emissions. While we share your concerns regarding climate change, it is important that all strategies used to address greenhouse gas emissions ensure the infrastructure needed for advancing cleaner technologies, the availability of an adequate energy supply over the long-term, a strong manufacturing sector, and a thriving state economy.

    “SEE California is committed to finding solutions and shares your desire to develop and implement a policy framework that will enhance California’s already strong leadership in the area of climate change, however…without the proper framework, the ambitious goals contained in this bill may never be realized and the political will to follow through will be weakened by an anemic economy.”

    The cold reality that SEE California must face is that the Governator never would have supported this bill if he didn’t think that it would help him get re-elected. Which means that the people of the state of California probably believe in the legislation…which is going to make it very difficult to battle.

    We also think that you’re going to see more of these kinds of bills popping up in statehouses all over the country, as the global warming issue gains greater currency among the population. And when venture capitalists start supporting them, accusing the mainstream business community of being “doomsayers” who “just don’t get it”…well, that can have a major impact on the substance and style of the debate.

    Al Gore may have lost the battle for the election. But by playing a major public role in bringing the global warming debate to the forefront (which will happen yet again when, like it or not, his documentary, “An Inconvenient Truth” starts getting end-of-year notice and awards), he may up winning the war.



    • The US Food and Drug Administration (FDA), after years of debate that at times seemed more political than health-focused, ruled that the Plan B morning-after contraceptive pill can be sold over-the-counter to women older than 18 years of age. People under 18 will require a prescription.

    The decision was cheered by reproductive rights advocates, who say that the availability of the Plan B pill will reduce the incidents of abortion in the US. It was decried by anti-abortion forces who argue, in essence, that use of the Plan B pill is abortion. While the decision may have been made by FDA, the political firestorm is not expected to die out. President George Bush said at a press conference that he agreed with the FDA ruling, which enraged many in the conservative wing of his party who form his base, and did so at a time when the mid-term elections are just months away, with Republicans already concerned about losing their majority in the Senate, House of Representatives, or both.

    It is expected that Andrew C. von Eschenbach, acting commissioner of the FDA, now will be approved by the Senate and can take the word “acting” out of his title; the nomination had been held up pending an FDA ruling on the Plan B pill. However, questions continue to be asked by reproductive rights advocates about whether the three-year delay in approving the drug – even after a scientific review had deemed it safe – was politically motivated.

    In a move that suggests how political and cultural winds may be shifting, Wal-Mart announced that it will carry the Plan B emergency contraceptive pill for over-the-counter sale, possibly by the end of the year.


    • The New York Times reported that coupon clipping “is a way of life, at first glance, that seems especially vulnerable to the relentless advance of the Internet, with its ability to aim at narrow groups of consumers and measure results. An estimated 99 percent of the roughly 300 billion coupons distributed annually in the United States — mainly in Sunday newspapers — end up in the trash, unused and unredeemed.”

    However, “while the cool logic of efficiency suggests the traditional paper coupon is in imminent peril, the marketplace tells another story — at least so far. The coupon business is a case of new technology confronting a deep-seated commercial culture. Market practices, business relationships and consumer expectations developed over decades are not likely to be quickly swept aside.”

    Maybe not quickly, and maybe not completely.

    But it seems to us that marketers have to start thinking about young people, who have little or no allegiance to traditional shopping patterns, and who will represent core consumers in just a few years. This is the generation that doesn’t remember a time without Amazon.com…and they don’t have to clip coupons to get deals on that website. Furthermore, they are used to highly targeted offers from Amazon, offers keyed to previous shopping behavior, offers that have nothing to do with the massive selection of coupons found in magazines or in freestanding inserts.

    The Promotion Marketing Association says that the use of online coupons is rising rapidly, by more than 50 percent a year, but that they still account for less than 1 percent of the consumer goods coupons distributed.

    This is going to change. It is inevitable. And the marketers that start preparing now for these shifts in consumer behavior are the ones that will, in the long run, win.



    • The Pittsburgh Post Gazette reported that “fresh evidence shows that high energy prices and sagging home values are pinching the main driver of the of the U.S. economy - the Average Joe's wallet. Retailers and economists say many Americans are waiting to buy big-ticket items and cutting back on frills. Homeowners are shelving plans to remodel kitchens. Families are dining out less and tightening their budgets.” And, at the same time, “homeowners are seeing a key source of their wealth lose value as housing prices fall in some parts of the country.”

    The impact is seen across the board, in a variety of retailing venues, with even Wal-Mart – which normally might be expected to the beneficiary of tightened finances – finding that sales are being affected by fuel prices.


    • Ahold continues to maintain that rather than meeting with the dissident stockholders that want to see the company sell off its US operations as a way of maximizing shareholder value, it will continue focusing on its own review of existing businesses, expected to be completed later this fall.

    Meanwhile, the dissidents – hedge funds Paulson & Co. and Centaurus Capital – reportedly are looking to line up additional support for their position among other major shareholders.


    • The Florida Times-Union reported that Wal-Mart has passed bankrupt Winn-Dixie to become the second largest grocer serving the northeastern Florida counties of Baker, Clay, Duval, Nassau and St. Johns counties. Publix remains on top.

    The difference, according to the paper, is that Winn-Dixie has been closing locations or hasn’t had the cash to improve the ones that it is keeping open; both Wal-Mart and Publix “are opening new locations or improving existing ones. They're focused on each other and the remaining competition while Winn-Dixie focuses on its sheer survival.”

    To us, the real issue isn’t whether Winn-Dixie has the money to spend. It is whether it has the vision to create compelling shopping experiences that are relevant to the modern shopper. We remain unconvinced that this is in the cards.


    • The Los Angeles Times reported that the California Korean American Grocery Retailer Association has filed a lawsuit against Wal-Mart and former United Nations Ambassador Andrew Young, who worked as an advocate for the retailer among minority communities. Young recently resigned after being quoted as saying that Jewish, Korean and Arab grocers "ripped off" African Americans by overcharging them for "stale bread, and bad meat and wilted vegetables."

    The Association is seeking $7.5 million in general and special damages and an unspecified amount in punitive damages.

    Let’s see. Young has been disgraced in the public arena. Wal-Mart has been tarred by his stupid comments. And we suspect that nobody has stopped shopping at Jewish, Korean and Arab grocers because of the Young comments.

    The Korean Grocers Association should take the high road and make sure that its members are doing a good job of serving their customers – all their customers. A lawsuit here has no purpose that we can see other than to drag out and give greater publicity an already ugly incident.

    There must be a better way for the association to serve its members and to help them serve their shoppers.



    • The Associated Press reported on a study by Trust for America's Health saying that 31 out of 50 US states actually showed an increase in obesity rates last year, despite all the media attention paid to the country’s expanding waistline.

    Mississippi is the heaviest state, with 29.5 percent adults there classified as obese – a 1.1 percent increase over a year ago. It is followed by Alabama, at 28.7 percent, West Virginia at 28.6 percent, Louisiana at 27.4 percent, and Kentucky at 26.7 percent.

    The nation’s leanest state is Colorado, at 16.9 percent – slightly up from a year ago, but not enough to be considered statistically significant. About 18.2 percent of Hawaii’s population is obese, followed by Massachusetts at 18.6 percent, and then both Vermont and Rhode Island, each at 19.5 percent.

    "Obesity now exceeds 25% in 13 states, which should sound some serious alarm bells," according to Jeff Levi, executive director of the Trust. "Quick fixes and limited government programs have failed to stem the tide.”

    Among the recommendations being made by the Trust:

    - Employers should offer employees nutrition counseling and subsidize health club memberships.
    - The government should require health screenings for people on the public dole, with incentives for those who achieve and maintain good health.
    - Local governments should adopt zoning regulations that encourage the creation of walking and bicycling paths and jogging routes that will help people get into shape.

    We agree with these recommendations. Sure, how much one eats and exercises is a matter of personal choice. But the strain on the health care system is enormous, and as a culture we ought to make it easier for people to make the choices that will help them live longer and more productively.


    • The Wall Street Journal reported how the retail wine market “is in upheaval because its many barriers are starting to crumble.” Not only are legal barriers preventing the direct interstate sale of wine to consumers being taken away, but companies like Costco are pushing for legislative reforms that would eliminate the protected status that many wholesalers enjoy in certain markets.

    It can’t happen soon enough. However, retailers need to be planning for the long-term, because as the WSJ notes, once the playing field is level on a national basis, it will create an environment where a major retailer can look to make a coast-to-coast play – similar to how Starbucks has dominated the coffee business or Home Depot has worked the do-it-yourself business.

    Establishing tight relationships with consumers that can survive such a competitive onslaught ought to be something that is done now…not later. Later inevitably will be too late.



    • The Boston Globe reported that despite a ruling by India’s health minister that Coca-Cola and Pepsi products did not have unsafe levels of pesticides – as has been alleged by a non-governmental research organization in that nation – seven Indian states have continued their partial or complete bans on the sale of those companies’ soft drinks because of health concerns.

    However, analysts say that while some are emphasizing health concerns, the real issue is politics – with opponents of the soft drink companies really acting out of ideological motives that are focused on a kind of nationalism that rejects foreign investment and cultural influence.

    Go figure. Politics taking precedence over science and health. We’re shocked.


    Ad Week reported on a Nielsen Media Research study saying that “consumers for the most part enjoy watching ad-supported media while grocery shopping and their buying decisions are often influenced by such messages.”

    According to the study, more than two thirds of consumers questioned said that they would change their buying decisions based on information provided by an in-store ad supported media.

    We believe this is utter nonsense.

    Okay, maybe that’s a little bit strong. But we think that how big an impact advertiser-supported media has in a supermarket largely depends on what message is being delivered and who the customer is that is being targeted. While there may be markets where two thirds of the customer base pays attention to such ads, we suspect that there also are markets where virtually nobody pays attention to them, and where the incessant droning of advertising becomes just more noise.

    We continue to believe that one of the real flaws in the whole notion of in-store TV networks is that they become a “me, too” option…used by supermarkets to generate ad revenue rather than to increase their own brand equity.

    We do think there is one advantage to them, however – they tend to have really cool flat screen monitors that look good. We were in a supermarket the other day that was broadcasting messages in the produce department on a 13-inch monitor with a built in VHS player. We have no idea what the message was (we think it was about different kinds of apples), but the damn thing looked like a hostage tape.



    • As expected, Rite Aid Corp. announced its acquisition of Eckerd and Brooks drug store operations of Canada’s Jean Coutu Group Inc. for about $2.55 billion in cash and stock – a move that makes the company the largest chain drug store operator on the east coast, though it remains in third place nationally behind Walgreen and CVS.

    “Adding these stores to our company gives Rite Aid scale comparable to our major drugstore competitors, and we believe this enables us to compete more effectively in a highly competitive business,” Rite Aid President and CEO Mary Sammons said in a statement.


    • The Washington Post reported on a new store opened by Ahold-owned Giant of Landover in Dunkirk, Maryland, the first of six stores that will be opened or renovated by the end of the month, designed “to turn Giant from a local grocer into a one-stop-shopping destination housing ‘stores within a store’ that sell items as varied as piñatas and pet leashes.”

    For better or worse, the Post notes that the new Giant looks a lot like Super Stop & Shop stores in New England…which perhaps was inevitable since many of Giant’s operations has been absorbed by Stop & Shop in an effort to consolidate, create efficiencies and save money. What remains to be seen is whether traditional Giant shoppers will embrace the new format – or whether they will see it as yet more evidence that the “local grocer” that they loved is but a distant memory.


    • Trader Joe’s announced that it will open a store in the metro Atlanta, Georgia, market later this year.

    Meanwhile, the Milwaukee Journal Sentinel reported that Trader Joe’s will open its first stores in the Wisconsin market later this fall, but already is generating considerable buzz…even though it has done virtually no advance marketing.

    You need to read Len Lewis’s book, “The Trader Joe’s Adventure,” to get a good look at the strategies and tactics that TJ’s has made work for it. It wouldn’t take a lot of digits to count up the number of supermarket chains that can create this kind of anticipation…and we think that this needs to be the goal of every organization. Not necessarily with the same approach as Trader Joe’s, but definitely with the same desire to create a differential advantage that defines its place in the marketplace…and in the consumer’s heart.


    • The Canadian Food Inspection Agency (CFIA) reported last week that the dairy cow from the province of Alberta that was found last month to have bovine spongiform encephalopathy (BSE), better known as mad cow disease, probably got it from eating feed contaminated with banned material.

    The report came as Canadian officials confirmed that an eighth case of BSE had been identified in that nation.

    Which is remarkable, because US officials have pretty much declared that it is impossible for that many cases to even exist in our country.

    A claim that, in our view, has much more to do with bull than cows.



    • Ben & Jerry’s Homemade announced last week that it will stop using an egg supplier accused of mistreating its chickens. Company CEO Walt Freese said that it “seemed like the right thing to do.”

    The moves comes after the Humane Society of the United States criticized Unilever-owned Ben & Jerry’s for buying eggs from Minnesota-based Michael Foods, which has been accused of keeping chickens in cages so small they can’t spread their wings, of having hens dying of starvation as well as dead chickens kept in the same cages as live ones, and other general mistreatment of their poultry. Ben & Jerry’s was informed of the infractions, according to the Humane Society, and promised to make a switch to another farm for eggs to be used in its products. Then Ben & Jerry’s apparently changed its mind, which caused the Humane Society to go public with its criticism.

    The thing about having a company tied to ethical issues and high-minded values is that you have to be consistent every step of the way. Especially these days, one misstep and everybody knows about it.


    • The Indianapolis Star reported that BML Investment Partners, the fourth largest shareholder in Marsh Supermarkets, has filed an objection with the US Securities and Exchange Commission (SEC), claiming that the sale of Marsh to Sun Capital does not reflect the full asset value of the food chain.

    However, analysts do not believe that the BML filing will hinder the sale of troubled Marsh, which is scheduled to close later this month.


    • Associated Grocers of Seattle has agreed to buy the Redmond, Washington, located operated by Larry’s Markets for about $430,000 and continue to operate it under the Larry’s banner. The store will be kept open while AG makes improvements in its various departments.

    “We see a great opportunity to re-establish the Larry's Redmond Town Center location as one of the prominent supermarkets on the Eastside. It is our intention to make the store a key member of the Redmond Town Center business community, working with the store's customers, employees and neighboring businesses to provide an exceptional shopping experience," said John Runyan, AG's President and CEO.

    Larry’s Tukwila store will be sold to an independent company, Tukwila Trading, for $200,000.

    And, Larry’s North Seattle store will be sold for $500,000 to Hop Thanh Supermarket.

    The Seattle Times reports that these sales essentially close the books on the recent, sad history of Larry’s Markets, which once had a national reputation for innovation and strong foodservice excellence.

    Larry's other stores that were bought last week by Metropolitan Market and a real-estate firm called TRF Pacific.


    • Safeway announced that it has awarded its $200 million advertising account to Omnicom Group's DDB of Chicago. The decision came after Safeway decided to put its ad business up for review just a year after adopting the “Ingredients for Life” campaign that was engineered by Dailey & Associates, its longtime agency.


    Crain’s Chicago Business detailed how McDonald’s believes its future is in chicken sandwiches, salads and healthier fare, while the opposition – notably Burger King, Hardee's, Carl's Jr. and Jack in the Box – “all have introduced bigger hamburgers in the past couple of months, tapping into a rise in burger sales across the fast-food industry.”

    The basic issue seems to be whether the core product offered by all these chains is the hamburger – or whether the core product is speed and convenience, and that the kind of food served is more a matter of cycles and trends.

    We’d vote for the latter approach. We think that the food itself isn’t as important as the convenience and the kinds of toys and incentives offered to kids. If taste were important, nobody would go to any of these places. (Except to our favorite, Burgerville, out in the Pacific Northwest, where taste and nutrition actually seem to be a priority.)

    We’ll tell you this. During our drive to Chicago while on vacation, we tasted McDonald’s new tortilla chicken wrap…and think that if this is the best they can do, it is time to hire a new chef. We’ve tasted cardboard with more flavor.



    • Wal-Mart announced that it will not challenge the city ordinance in Turlock, California, that prevents the construction of big-box stores bigger than 100,000 square feet that devote at least 5 percent of their space to groceries.

    Wal-Mart already appealed the ordinance to the US District Court, but lost. Turlock has been the center of attention in California, one of several communities that have sought to stop Wal-Mart from opening planned supercenters throughout the state.

    We think that Wal-Mart is right to drop its challenge and move on. They should go where they are wanted.


    Crain’s Chicago Business reported on how Starbucks is doubling its expansion pace in the Windy City, planning to add as many as 250 stores in the next five years.

    As Crain’s writes, “Starbucks is saturating the U.S. with more locations to boost its yearly sales 20%, even as concerns about slowing consumer spending linger. The aggressive expansion — 2,400 new stores planned around the world next year — comes as the company faces new rivals in the market for specialty coffeehouse sales, which was $10.6 billion in 2005. In recent years, Dunkin' Donuts and even McDonald's Corp. have moved in on Starbucks' turf.

    Forget calling Chicago the “Windy City.” Now it’ll be “Seattle by the Lake.” Which is okay with us, since it means wherever we’re there, a venti skim latte will always be just a block or two away.


    Crain’s Chicago Business reports that “a group of Starbucks employees in Logan Square have joined a union, the first group outside of New York, despite the coffee company’s refusal to recognize organized labor.” The workers have affiliated themselves with the Industrial Workers of the World Starbucks Workers Union “in an effort to increase hourly pay, have a guaranteed number of work hours per week and to reinstate employees who they claim were fired for union organizing activity. Union representatives declined to disclose membership numbers.”

    The union is demanding a pay increase to $10 an hour for entry-level workers from the current $7.50 an hour, as well as guaranteed minimum hours and healthcare benefits.


    • Couche-Tard has acquired 54 company-owned c-stores under the Holland Oil and Close To Home banners in Ohio from Holland Oil. Terms of the deal were not disclosed.


    • In a move reminiscent of Wal-Mart-owned Asda’s strategy of opening stand-alone George clothing stores in the UK, Loblaws reportedly will open two Joe Fresh Style clothing stores in Toronto, looking to expand the equity that it has built up in the clothing line currently cols in its superstores. The decision is seen as a way of girding for Wal-Mart’s expansion of its supercenter business into Canada.


    • The Carnival Supermarkets chain, based in Dallas-Forth Worth, opened a 24th store that it described as a flagship unit unique positioned to serve the area’s fast-growing Hispanic population.


    • Target announced that it will launch at least 18 new in-store medical clinics this fall, partnering with Medcor in opening the new facilities. Target used to work with MinuteClinic, but abandoned that relationship when it was acquired by CVS.

    The new arrangement, according to the Minneapolis/St. Paul Business Journal, will give Target more control over the clinics than it had in the past.

    We still think that you’re going to see retailers like Target, Wal-Mart and Walgreen making moves like CVS did – acquiring companies that operate these clinics so that they have more control and can take advantage of the long-term growth potential.


    • Meanwhile, Wal-Mart announced that it has contracted with Healthy Access to open in-store health clinics during the third quarter in a number of markets, including Texas

    Published on: September 5, 2006

    Back before we went on holiday – which seems like a long, long time ago – MNB had a story about a new rebate law in Rhode Island that says a retailer advertising a manufacturer's rebate on any sale item must apply the rebate amount at the time of the sale and complete the rebate redemption process itself, rather than requiring the consumer to do it. What this means on a day-to-day basis is that shoppers have gone to supermarkets and other retailers throughout the state that have advertised manufacturer rebates that resulted in products being for free, bought the relevant products and then expected to pay nothing for the items. The new law also means that there has been a run on these same products, with shoppers buying up soft drinks and toothpaste, for example, that have offered such rebates…with rain checks given out when stock ran out.

    Our comment: It amazes us that the Rhode Island legislature has so much time on its hands that it is able to consider and vote on legislation like this.

    Rebates are fine, and if they result in products being for free, that’s fine, too. But the idea that retailers should have to give away the products and then apply for the rebates seems a little silly. As consumers, we sometimes will buy a product knowing that we can send in a proof of purchase and get money back…but to be honest, we rarely do it. We just forget, which we know makes us an advertiser’s dream customer. But that’s our fault, not the advertiser’s and not the store’s…and we don’t think government intervention is required to protect us from ourselves.


    A number of MNB users thought we were flat-out wrong in our assessment.

    MNB user Philip Herr wrote:

    Heartily disagree with your position on failure to comply with rebates being the customer's fault. While you may be the marketer's dream, the vast majority of people who attempt to gain a rebate are forced to jump through hoops. What may ostensibly be designed for security reasons, is really a naked attempt to make the conditions so hard to comply with, that consumers frequently are stymied. How frustrating to receive a postcard from the marketer telling you that because you failed to clip the UPC code and enclose the dated receipt and then clip the end of the CD case (or other such device), that your rebate application was denied. Not only do the majority forget to send in the application, a large proportion of those sending it in fail to comply in some way.

    This is where the retailer comes in. Either they exercise their power over the manufacturer and insist on rebates being instant at check-out, or just to reduce the damn price in the first place (a la Wal-Mart). If the retailer is truly to act as agent for the customer (thanks Glen Terbeek for one of the best concepts ever), then they are being remiss to allow these machinations by manufacturers.


    MNB user John Burian wrote:

    Have you ever sent in for a rebate? The whole rebate thing is a scam. Yes the manufacturer hopes you don't apply for the rebate. Yes the BETTER manufacturers actually honor rebates. My own experience has been: rebates received in a very short (one or two weeks) time - very rare. Rebates received within one or two months later - more frequent time frame. Rebates received three to six months later - happens occasionally, I can remember one from GE coming more like six to eight months later. I also have any number of small one or two dollar rebates that I never received.

    If the manufacturer wants you to have it at a lower price or free than do it. Don't force people to cut proofs, mail and then track rebates especially for one or two dollars. Then if you don't receive your one or two dollars, how much effort do you put into following up?

    Personally, rebates no longer entice me to buy a product anymore. If anything, I will avoid buying that product withwithout rebate unless I absolutely want it and not a substitute.

    I applaud R.I. for what I see as applying pressure on the manufacturers to honor rebates in a consistent and timely fashion. If they did this as a matter of course, we wouldn't be having this conversation. I see the R.I. legislature as protecting the little guy from all these scam artists not ourselves. I would suspect that there is at least one and probably more than one person in the R.I. legislature that has been bitten one too many times by the rebate scam.

    I was very surprised by your position on this.


    You’re right. We have never bought anything because of a promised rebate, and because we almost never send in for them, we have virtually no practical experience on which to base our opinion.

    It just didn’t seem like something that a legislature ought to be messing around with…though maybe we’re wrong about that.

    MNB user Jackie Lembke wrote:

    I agree that the rebate is the customer's responsibility, but many times the manufacturer makes it almost impossible and definitely difficult to meet the conditions of the rebate. You have to fill out forms, include UPC codes, the register receipt and mail all this within days of purchase. Just give me the item at a reasonable price. Forget the rebate. You can't dispose of all the packaging until you find everything needed to receive the rebate, and then when you finally find all the information its too late. It comes very close to the old bait and switch. I rarely buy based on the rebate because I know I probably will not get the information mailed in time to receive the rebate anyway.

    MNB user Justine Raphael wrote:

    Yours is a fine attitude if we are talking about toothpaste--we all know enough to mentally "add back" the rebate to get the true price, and can choose to pursue or forgo the actual rebate. But I am sure you have experienced, as I and many others have, buying a more expensive item (computer, cell phone, camera, TV, you name it) where a hefty rebate is promised and makes a difference in our choice to even purchase that item.

    Many of us have pursued those rebates and never received them--after many contacts with the company, many promises, no money. I am still waiting for the $100 owed me for two cell phones I purchased two summers ago--I know I will never get it, and that seems to be the point of the RI law. If stores use the rebates to sway purchases their way, then they need to take responsibility for the end result (including an absence of the rebate) They get the benefits of advertising the rebate - increased traffic, more units of whatever going out the door, impulse buying of other items. Why should we be suckered by false advertising?


    And MNB user David J. Livingston wrote:

    I really hate rebate promotions. I realize the manufacturer hopes that the consumer never actually applies for the rebate. However I'm sure I'm not alone when I say I am having difficulty in receiving the rebate after applying. It is quite easy to violate the terms in the fine print. The one problem for me that comes up most often is they will not send a rebate to a PO Box? Why? They certainly have no problem with me sending in my rebate for to their PO Box. So that means I have to expose my private street address probably for no other reason than to be able to geo-code where the rebate was sent for consumer research purposes.

    Another problem is they want you to send in the receipt as well. Maybe I want to keep my receipt for tax purposes. So now I have to make a copy. Then I have to keep a record of sending in the rebate so I know to follow up if it does not show up. This is a lot of work whether you are getting $1 back or $200 back.


    We think it is fair to say you’re not alone. It also is fair to say we had no idea that rebates would generate such passionate responses…which probably is why the Rhode island lawmakers got involved in the first place.

    Not everyone thought the legislature should have gotten involved, though.

    MNB user Sean Fannon wrote:

    This is another example of the government not thinking anything through because even though the government has intervened to allow that all rebates are given to consumers instantaneously. The irony is that although they thought this would help the general public, it will actually take the benefit away. My guess is once manufacturers see that the rebate offers redeem at close to 100% they will stop offering rebates to R.I. So what will happen? Consumers that really want rebates will drive out of the nation’s smallest state to nearby state’s retailers to receive this benefit…If they can remember to send it in and rationalize the spend in gas.

    And another MNB user responded:

    This just reinforces how out-of-touch some legislators can be. If ANY of these people knew anything about consumer marketing, they would know that rebates are simply a cheap promotional vehicle that most marketers use to offer value that is less likely to be redeemed than other options --- and therefore requires a smaller budget. To put the onus on the retailer is insane. Now the retailers are going to have to do something to protect THEIR potential liability, which will mean deductions, post-audit problems, etc.

    What a mess, just because the legislators couldn’t bother to figure out how things really work.


    And MNB user Dan Onishuk wrote:

    Kevin, rebates are a retailers and manufacturers dream. Last I heard less than 40% of all rebate items that are purchased at the register get redeemed. Some retailers create their own rebates, and if less than 40% get credited out of that fund is it really fair, is that how you reward your customers. I wonder how many people don't make a purchase because of the inconvenience of having to deal with the pain of submitting a rebate. If a retailer and manufacturer are willing to offer the rebate, than why not reward them and do it at the register, something else could occur if a retailer went that route, they could increase their sales that day, maybe Mr. and Mrs. Shopper might spend a few extra bucks while they are in the store. I agree with you that you shouldn't need the state to introduce it, it should be part of a creative marketing incentive from the retailer and the first one to do it, well you can count on everyone following the lead.


    KC's View:

    Published on: September 5, 2006

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    These are among the issues that Kevin Coupe, MorningNewsBeat’s “Content Guy,” addresses each day on his website…and they are the focus of a new presentation he is creating for 2007 audiences. His premise: the stakes are too high, the time is too short, and the customer is too demanding for retailers and manufacturers to put off critical decisions that will define their futures and their hopes for survival.

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    KC's View: