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    Published on: October 19, 2006

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    KC's View:

    Published on: October 19, 2006

    MNB Content Guy Kevin Coupe has noticed that Supervalu, Disney, Wal-Mart, the New York City Health Department and the US Department of the Census have combined this week to offer ever more compelling evidence that retailers need to be aggressive in how they treat the issue of consumer health.

    To hear Kevin’s full commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:
    KC's View:

    Published on: October 19, 2006

    The Los Angeles Times reports that Wal-Mart CEO Lee Scott is scheduled to feted next week “at a gala organized by movie producers, attended by media giants and entertained by legendary rock band the Eagles.” However, Scott is not being recognized for heading up the company that sells more DVDs than any other retailer in the country; rather, Scott is being honored for leading the company’s environmental initiatives and moves toward sustainability.

    “Guests will dine on organic and ‘fair trade’ food such as New York grass-fed beef at the Rainbow Room atop Rockefeller Center” in Manhattan.

    The event is being put on by movie producers Bob and Harvey Weinstein, who have produced such films as “Pulp Fiction” and the “Kill Bill” movies.
    KC's View:
    It is more than a thousand miles from Bentonville to midtown Manhattan…but a lot farther than that when you really think about it.

    With these kinds of contacts, if things don’t work out for Scott at Wal-Mart, it seems likely that he’ll be able to land an indie production deal at Paramount.

    Published on: October 19, 2006

    The Wall Street Journal reports that the latest market studies in the UK indicate that Tesco’s market share there has grown to 31.4 percent in the most recent quarter, up from 30.1 percent during the same period a year ago.

    The number three food retailer, Sainsbury, increased its market share year over year to 15.7 percent from 15.5 percent.

    Wal-Mart’s Asda Group had a market share for the quarter of 16.6 percent, unchanged compared to a year ago.

    The fourth-ranked chain, William Morrison Supermarkets, saw its market share drop from 11.3 percent to 11.1 percent over the year’s time.
    KC's View:
    Tesco, of course, can’t expect anything close tyo that kind of dominance in the markets where it will be operating in the US sometime next year. But you hear these numbers, and the prospects for an interesting confrontation between global powerhouses in Southern California and Arizona certainly are certainly shaping up nicely.

    Published on: October 19, 2006

    Australia's second-largest retailer, Coles Myer, has formally rejected the equivalent of a $13.8 billion (US) bid for the company submitted by a consortium of private equity companies led by Kohlberg Kravis Roberts (KKR). The rejected bid was actually five percent higher than the original KKR bid that had been labeled as too low by Coles Myer management.

    Coles Myer chairman Rick Allert said in a statement that even the larger bid “substantially undervalues the company and its prospects.”

    After the snub by Coles Myer, KKR withdrew the bid. Reports are that the consortium has now abandoned its plans to acquire the company.
    KC's View:
    We have to say that, having recently seen the organizational chart at Coles Myer as presented by its CIO at the CIES It/Supply Chain conference, its structure and expansiveness would have been difficult for anyone to swallow. Besides, from what we could hear it sounds like Coles Myer has been doing what it needs to do in terms of cutting costs and getting efficient about how it does business…having to also deal with the cuts that inevitably would have been demanded by a new private equity owner might have been too much for the business to handle.

    This said, there still remains the possibility – we’re not sure that you could raise it to “probability” levels just yet – that some existing big retail player such as Tesco or Wal-Mart could make a move to acquire the company.

    Stay tuned.

    Published on: October 19, 2006

    Wal-Mart reportedly will expand its $4-per-month generic prescription drug program to more than a dozen states effective immediately. The Wall Street Journal reports that the new states to get the program, following what the retailer has seen as an outstanding launch in Florida, will include New York, Texas, Oregon, Arizona, Vermont and North Carolina, among others.

    The move comes several months ahead of the tentative schedule that had been laid out by the company, which would have seen a rollout early in 2007.
    KC's View:
    Almost more important than the immediate success of this specific program has been the fact that Wal-Mart has preempted everyone else, establishing the perception of clear leadership in the area of drug costs. Lots of companies have followed its lead, but they’ve all been following…nobody has been leap-frogging ahead.

    Especially in markets like Florida, this cannot help but bleed over into other areas, such as Wal-Mart’s use of in-store health clinics to help consumers control health care costs, that are of interest to the same demographic groups.

    Big win for Wal-Mart here.

    Published on: October 19, 2006

    • Supervalu earned the Retailer GEM Award for its Avenu program – which an integrated, targeted and personalized marketing network – at this year’s 15th annual Global Electronic Marketing Conference (GEMCON), held in Park City, Utah.

    Other companies receiving Global Electronic Marketing (GEM) awards were Ridley’s Family Markets, which earned the Al Lees, Jr. Award for Excellence Over Time, and MobileLime, which was named Best System and Program Vendor.

    • Published reports say that the United Food and Commercial Workers, representing some 12,000 employees of Stop & Shop and A&P banners in the New York metropolitan area, have reached a tentative agreement with the chains on a new contract. Terms of the deal were not disclosed, and union members are expected to conduct a ratification vote early next week.

    • A new study says that the US market for Hispanic foods is on a pace to grow from $18 billion annually in 2005 to as much as $25 billion by 2015. A statement released by Market said that this growth would be in both Hispanic stores and restaurants as well as Hispanic food products, and that it would be fueled by “the growing buying power of Hispanics, which is expected to reach $1 trillion by 2010.”

    • The Wall Street Journal reports that US consumers will no longer be able to buy stamps from post office vending machines, which are being eliminated because they are costly to maintain and underused by consumers. The US Postal Service also reportedly will cut back on the number of mailboxes scattered around the country in a cost-saving move that reflects a drop in consumers using what now is referred to as “snail mail.”
    KC's View:

    Published on: October 19, 2006

    Business Week reports that as Wal-Mart continues to face criticism about its health and employee benefits, employees at one Florida store are taking matters into their own hands. “On Oct. 16, workers on the morning shift walked out in protest against the new policies and rallied outside the store, shouting ‘We want justice’ and criticizing the company's recent policies as ‘inhuman.’ Workers said the number of participants was about 200, or nearly all of the people on the shift.”

    Specifically at issue are new policies cutting “the hours of full-time employees from 40 hours a week to 32 hours, along with a corresponding cut in wages, and to compel workers to be available for shifts around the clock,” as well as a policy saying that workers are required to call an 800 number when they are sick.

    Wal-Mart spokesman David Tovar tells Business Week that “his understanding is that the protest was prompted by the reduction in hours, which he says was simply a mistake. ‘The new schedules posted made it seem like some hours were reduced, but that was inaccurate and we have corrected it.’”

    It was, according to the story, the first time that Wal-Mart has faced a worker-led revolt of such scale.

    • The CBC reports that Wal-Mart has opened two stores in Canada – and will open a third next month – that use an extra name on their store fronts: ‘Your Fresh Market.”

    The new name and prominence are meant to draw attention to the fresh foods carried by the company, such as take-out and prepared meals, as well as an in-house bakery and deli.

    The store is expected to be the first in a major Canadian roll-out for Wal-Mart.

    • Wal-Mart said yesterday that it will source more than $600 million (US) in product from India during 2006, up from $400 million (US) a year ago.

    • Published reports say that Wal-Mart is negotiating to acquire all or some of Migros Turk, though the reports do not specify the level of interest nor the possible price tag. And it should be noted that the list of companies that Wal-Mart is speculated to be interested in buying is much longer than the list of companies it has actually bought.

    • Wal-Mart announced yesterday that it will immediately cut the prices on more than 100 popular toys as a way of establishing price leadership before the end-of-year holiday season, characterizing the price cuts as "just the start of thousands of price cuts on key gift, entertaining and holiday items.”
    KC's View:

    Published on: October 19, 2006

    • Ahold announced yesterday that Arthur Brouwer, the company’s corporate Chief Business Support Officer, has resigned from the company to take a position at another, unidentified firm. He had been in the job since 2003, and was with the company for more than a decade.

    Until a permanent successor is named, Brouwer's role reportedly will be assumed by Dick Boer, president/CEO of the Albert Heijn chain and an acting member of Ahold's Corporate Executive Board.
    KC's View:

    Published on: October 19, 2006

    On the subject of yet another disappointing financial report issued by A&P, one MNB user wrote:

    Not only did A&P lose money again, they blamed it on the weather. They recycle that excuse about once a year. They also said they have put their new hybrid stores in Michigan on hold. Farmer Jack is getting to be like an unwanted visiting relative that won't leave. They never cease to amaze me. They used to reinvent themselves about every six months. Now it seems= they are shooting for every six weeks.

    Unfortunate, but true.

    We’re waiting for the inevitable press release that says A&P is planning to cut prices, expand SKU count, and offer better one-stop shopping…as if they’ve deciphered the Rosetta stone over in New Jersey.

    Writing about the healthier menus to be offered by theme parks such as Disneyland and Sea World, MNB user Richard Lowe wrote:

    It's great to see these large enterprises getting healthy. I hope it is not just window dressing and a fad! Like recycling, global warming, etc. I still recycle, drive a fuel efficient car, work 10 minutes from home, and at 62 have been preaching healthy eating since I started having children 40 years ago.

    I still find it very difficult when eating out finding whole grain rice, whole wheat pasta or another healthy for, whole grain pizza, etc. Sodium levels are still through the roof even though the American Heart Association has lowered their recommended levels. There is room for lots and lots of improvement and we are only taking baby steps at the moment.

    I am looking for some giant leaps! After all its been 40 years!

    Another MNB user offered:

    As a person with special diet concerns all the time, I do not care if places wish to offer unhealthy items for those who wish to consume them, but I do care that I often cannot find menu items I am able to eat. I would like more of a selection. I do not eat wheat and would prefer to have burgers without a bun offered, fruit choices, (not canned in syrup, but fresh) etc. I do not want Food Police, but I would like to have a whole apple or orange, a burger in a package with a fork etc. I know this flies in the face of speed in a drive-thru but could be accomplished. By serving fruits whole, spoilage would not be an issue with a low number of customers requesting these items.

    The bottom line is always the concern. No big dollars to be made off of the low number of customers requiring something different.

    Another MNB user wrote:

    I don’t see the trend to offering healthy options in theme parks as the companies “acting as food police.” Trans fat free frying does not imply any trade-off for the customer, and indeed, healthier dining choices are just that – choices, which the customer may choose or not depending on their priorities while they’re on vacation.

    I welcome this trend, and hope it will be extended beyond just theme parks to other travel venues, particularly to more and more airports, many of which still seem to offer little in the way of healthy on-the-go eating options.

    On the subject of chocolate beer and all the recommendations we’ve gotten this week, MNB user Chris Esposito wrote:

    Interesting to read how many people think there is actually chocolate in some of the beers they mention (i.e. Young’s, Rogue). The term chocolate malt has been around long before people starting thinking about making chocolate flavored beer. Maybe this is a new truth in labeling issue?? Glad to hear you’re keeping an open mind however.

    Responding to our many articles about nutrition and health issues, MNB user Doug Campbell wrote an email that we suspect a lot of parents can relate to:

    Not long ago I tried a national brand of non-fat mayo in a tuna sandwich and served it to my daughter. She winced and asked, "Dad, what's wrong with the tuna fish?" And then she just threw out the sandwich. In my household we still take our chances with good old Hellman's Real Mayo.

    In our house, it isn’t just the kids who would do that. Mrs. Content Guy would race them to the garbage can.
    KC's View:

    Published on: October 19, 2006

    The NY Mets defeated the St. Louis Cardinals 4-2 in the sixth game of the National League Championship Series, sending the series to a seventh and deciding game to determine which of the teams will win the National League pennant and go on to face the American League Champion Detroit Tigers in the 2006 World Series.
    KC's View: