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    Published on: July 9, 2007

    The Los Angeles Times reports that the United Food and Commercial Workers (UFCW) has notified Southern California’s three major supermarket chains – Albertsons, Ralphs and Vons – that it is prepared to cancel the mutually agreed upon contract extension that has kept its membership working at the three companies since a three-year deal expired on March 5.

    There are 65,000 UFCW-represented employees working at the three chains, which endured a painful 141-day strike/lockout three years ago that resulted in lost sales and disintegrating goodwill between the two sides.

    The talks are scheduled to resume today, but the UFCW’s Rick Icaza said that the union was prepared to give notice of cancellation of the extension this week if significant movement is not seen. "We don't want to strike," Icaza said. "But our members are willing to fight for what they are entitled to."
    KC's View:
    One of the problems with going on vacation for any period of time is the possibility that I might miss a big news story. And if I’d had to guess when I left town back on June 28, I would have surmised that while I was gone, the Southern California labor situation would be resolved and peace would reign.

    Which shows that even at my advanced age, I’m still a little naïve.

    (Unless, of course, the two sides were keeping the hostilities alive until I returned? Nah…)

    Right now, I’m happy to volunteer my services – and those of my new partner, Michael Sansolo – to go to Southern California and help management and labor come to some sort of agreement that makes sense. And when that’s done, we’ll figure out whether Barry Bonds should be banned from baseball, whether Scooter Libby should be pardoned, what the national immigration policy should be, and how to deal with Islamic fundamentalists.

    I mean, what the hell. I’ve been on holiday and I’m feeling frisky.

    Published on: July 9, 2007

    Advertising Age reports that it appears likely that a number of the nation’s major food manufacturers plan to announce “dramatic,” “impressive” and – perhaps most important to industry execs - voluntary restrictions on how their products are marketed to children – enough so that a federal task force that would have suggested mandated restrictions decided to postpone its recommendations from a July release to September.

    "The extension will allow for a more thorough examination of new initiatives that many food and beverage companies are coordinating as well as a more comprehensive look at how all parties, especially the media, can work for the common good," said Sen. Sam Brownback (R-Kansas), the presidential candidate who helped to form the task force with Sen. Tom Harkin (D-Iowa), Federal Communications Commission (FCC) Chairman Kevin J. Martin and FCC Commissioner Deborah Taylor Tate.

    Gary Knell, coordinator for the task force as well as president/CEO of Sesame Workshop, agreed with the decision. "I am led to believe that we will get some impressive commitments from major advertisers. I am looking forward to dramatic statements on the part of the food companies so we can begin to look at media companies as part of the solution, rather than part of the problem."

    There seem to be two likely paths that the marketers could take – either reformulate their kid-oriented products so that they are more nutritionally acceptable, or pledge not to advertise nutritionally questionable products to children. Kellogg Co. already has made such a move, Ad Age suggests that the industry almost must live up to the example it already has set.

    As a matter of background, Ad Age reports, “The task force was a response to pressure from legislators and several studies questioning whether food and fast-food marketing -- much of it on TV -- was contributing to increasing childhood obesity and whether marketers and media companies were doing enough to halt the epidemic.

    “That pressure prompted 11 of the country's biggest food marketers to agree last fall for the first time to start taking nutrition into account when they pitch foods to children … The group unveiled a Council of Better Business Bureaus/National Advertising Review Council initiative and promised to devote at least half their kids' food ads to promoting either healthy messages or healthy lifestyles; limit their use of licensed characters; and take other steps including making specific public pledges of changes. There were few specifics, initially prompting speculation little change would occur.”

    New specifics are now expected to be unveiled on July 18.
    KC's View:
    On the one hand, I sort of think that the companies ought to be able to sell what they want to sell, and I as a parent ought to be able to determine what my kids eat and don’t eat. But that ship appears to have sailed. Besides, from a consumer point of view the argument that the average shopper simply cannot compete with hundreds of millions of dollars in advertising and marketing dollars is a fairly compelling one.

    That said, I have doubts about the long-term efficacy and commitment of such a program, and I use as my reference point what used to be called the “family hour” on television. The general idea was that the networks would only put family-driven programming on between 8 and 9 pm on the east and west coasts (7 and 8 pm in Central and Mountain Time), with voluntary restrictions on sexual and violent content. That always struck me as a good idea, but it has gone the way of the black-and-white television, and I’m amazed – and more than a little offended – at what goes over the public airwaves during those hours. I’m no prude, but there’s a time and place for everything.

    If voluntary restrictions in the food business are going to work, there has to be a real commitment to them; they shouldn’t just be seen as a way of getting federal watchdogs off the industry’s back. That wouldn’t be good faith, and I don’t think it would be good sense.

    Published on: July 9, 2007

    The Washington Post reports that Wake Up Wal-Mart’s campaign director and chief spokesman, Paul Blank and Chris Kofinis, plan to leave the organization to sign on with the John Edwards presidential campaign. Wake Up Wal-Mart was founded two years ago by the United Food and Commercial Workers (UFCW) as a way of publicizing what it sees as the retailer’s social and ethical shortcomings, and the departure of the two men, according to the Post, raises “questions about the fate of a movement that has turned the behemoth retailer into a hot political and social issue.”

    Both men came to the anti-Wal-Mart movement with political agendas and resumes – Blank worked for Howard Dean’s campaign and Kofinis worked for Wesley Clark in 2004. In moving to the Edwards campaign – which is said by many to be in trouble because of the perceived dominance shown by Sen. Hillary Clinton (D-New York) and Sen. Barack Obama (D-Illinois) – the two men will be signing on with a candidate that has been vociferous in his criticism of Wal-Mart’s anti-union bias and policies.

    Kofinis sought to put the likely departures into context last week, drafting an email that read, in part: "The fact is, the Wakeupwalmart.com movement, the campaign to change Wal-Mart, was never about two people. It's about the 377,000 supporters who have worked passionately and endlessly to change Wal-Mart and America for the better. And so, rest assured, the campaign and the Wakeupwalmart.com movement will move forward, it will become more aggressive, and it will reach even greater heights."
    KC's View:
    One thing certainly seems true – that the anti-Wal-Mart movement always has appeared to be as much about politics and power as about social concerns. Maybe more so.

    Published on: July 9, 2007

    The New York Times reports that “in just three years, sales of 100-calorie packs of crackers, chips, cookies and candy have passed the $200-million-a-year mark, making them a breakout hit on par with the SnackWells low-fat fad of the 1990’s.”

    This is just the beginning, the Times suggests, with plenty of new products on the way. And, it writes, “the growing popularity of these snack packs — sales grew nearly 30 percent last year — may also be another sign that some consumers have had their fill of supersize food.”

    The Times also notes that “a report last month from the Hartman Group found that 29 percent of Americans believed that 100-calorie packages were worth the extra cost.”
    KC's View:
    My favorite coming product cited by the Times is 100-calorie bags of Twizzlers, which are only the best candy in the marketplace. (Okay, maybe that’s a little over the top. But it is the one candy that, on a desert island, I’d chose to have cases of washed up on shore.)

    This makes me a prime example of what analysts say is the real consumer phenomenon – shoppers who don’t want to think. Which is why these kinds of ideas, proving real solutions to consumer problems, make so much sense and should be emulated more often and more specifically in the retail environment and in fresh foods departments.

    Published on: July 9, 2007

    The Rocky Mountain News had a good piece last week on the growth curve being enjoyed by Sunflower Farmers Markets, the concept created by Wild Oats founder Mike Gilliland, who left the chain back in 2001 and started the new company a year later. Sunflower “sells organic and natural foods, but its motto is ‘Serious Food . . . Silly Prices.’ While Wild Oats offers steaks from Coleman Natural, Sunflower sells Harris Ranch's organic beef for roughly half the price.”

    “We're a good foil to Whole Foods," Gilliland tells the News. "We sell a lot of the same products without the hoopla.”

    Sunflower currently has more than a dozen stores across the Southwest, and “plans to open six to eight stores a year, but as the company grows, Gilliland is mindful of what he sees as past missteps at Wild Oats. There are no corporate headquarters. He doesn't plan to grow through acquisitions. Sunflower's partners are using their money to finance each store.”

    Wild Oats currently is awaiting the result of legal wrangling that will determine whether it can be acquired by Whole Foods; federal regulators oppose such a move because they believe it will be anti-competitive. But Gilliland doesn’t agree. "I think Whole Foods would make Wild Oats better," he tells the News. "I don't view the deal as anti-competitive."
    KC's View:
    Yet another example of the logic that suggests the Federal Trade Commission (FTC) is making a serious miscalculation in opposing the Whole Foods-Wild Oats deal.

    Published on: July 9, 2007

    Published reports say that Carrefour’s head man in China, Eric Legros, believes that the France-based retailer that generate as much as $3.9 billion (US) in sales this year, which would represent a 22 percent increase over last year.

    The company already has 100 hypermarkets in China, and plans to open between 20 and 25 new units a year for the foreseeable future. While Legros reportedly said that the company is open to an acquisition, the company prefers organic growth that utilizes partnerships with – rather than acquisition of – local businesses.
    KC's View:
    After spending almost a week there recently while attending the annual CIES World Food Business Summit, there is no question in my mind that all the major international players will have to have significant Chinese operations if they want to remain atop the global retailing community. (This doesn’t represent any major leap of faith or intelligence on my part – I’m just listening and paying attention.) That means big moves from the likes of Wal-Mart, Carrefour, Metro, and Tesco – and they’ve only just begun, I suspect.

    Published on: July 9, 2007

    InsideIndianaBusiness.com reports that “The Kroger Company has announced it will close five stores in northeast Indiana. The affected sites are a Kroger store in Fort Wayne and Scott's Food & Pharmacy stores in Auburn, Columbia City, New Haven and Rochester. Kroger acquired 18 Scott's Food & Pharmacy stores in April. The company will keep 27 stores operating in northeast Indiana.”

    The company released a statement: “After careful analysis, we are confident our 27 remaining stores in the Northeast Indiana will effectively serve our customer base. Our goal is to ensure our customers that we have the right products, right location, good prices and a shopping experience that makes them want to return. Scott’s customers tell us they already are noticing the lower prices. This is an extremely important market for us and we are very pleased to deepen not only our economic investment in these local communities, but our philanthropy and corporate citizenship.”
    KC's View:

    Published on: July 9, 2007

    Safeway reportedly has been fined $675,000 by the US Environmental Protection Agency (EPA) for selling household cleaning products containing pesticides without having registered the items as containing these ingredients.

    "Proper registration of pesticides ensures that labels include use directions and safety precautions designed to limit risks to human health and the environment," Katherine Taylor, associate director of the EPA's Communities and Ecosystems Division of EPA Southwest Regional Office, said in the press release.
    KC's View:

    Published on: July 9, 2007

    In the UK, Wal-Mart’s Asda Group announced that it will implement a new nutritional labeling system that will according to CEO Andy Bond, provide a “common sense solution to something that shoppers can find very confusing. It’ll give our customers the best of both worlds – the simplicity and transparency of the traffic light labeling system, alongside the more detailed GDA (guideline daily amount) information that some customers demand.”

    The new system uses a green, yellow and red light symbol to highlight low, medium and high levels of sugar, fat, salt, saturated fats and calories in each product, as well as offering precise information about per-serving and percentage amounts of these items in each product.
    KC's View:
    I read this, and my first question is when Wal-Mart – looking to create a differential advantage for itself in food in the US – will make a similar move here. It wouldn’t be the first to do so – Delhaize America is doing much the same thing in its US stores – but it would be the biggest.

    Published on: July 9, 2007

    The Wall Street Journal reports that the Coca-Cola Co., which “urgently needs a strong brand of bottled, ‘ready-to-drink’ iced tea, one of the beverage industry's fastest-growing categories,” may be considering the acquisition of Cadbury Schweppes’ Snapple brand.

    However, not all analysts agree that Snapple would be a good buy for Coke, noting that the company has had three owners since 1993, and no longer is the hot commodity it once was.
    KC's View:

    Published on: July 9, 2007

    Illustrating that the rush to get rid of trans fats from America’s foods hasn’t lost any steam, Burger King announced Friday that it will use trans-fat-free cooking oil at all its US restaurants by the end of 2008.
    KC's View:
    The downside of this decision is that by removing the trans fats, Burger King’s products will have absolutely no flavor.

    The upside – the company reportedly believes it can return actual flavor to its foods by the end of 2010 or early 2011. Maybe.

    Published on: July 9, 2007

    • Reports out of Canada say that five people have fallen ill there because they consumed ground beef that may have been contaminated with E. coli bacteria. Canada Safeway is said to be voluntarily recalling the suspected contaminated products from the market, according to reports.
    KC's View:

    Published on: July 9, 2007

    • At Sobey’s in Canada, François Vimard, the company’s executive vice president of supply chain & technology, has been named CFO, succeeding Bruce Terry, who has resigned.

    • Sam’s Club, a division of Wal-Mart, has named Liz Kirkwood to be its new senior vice president of finance, succeeding Sam Dunn, who now is Wal-Mart’s chief administrative officer in Japan.
    KC's View:

    Published on: July 9, 2007

    Believe it or not, the world went on without MorningNewsBeat last week…and while the site was on hiatus, that doesn’t mean the Content Guy wasn’t paying attention. Here are a few stories that caught his eye…with commentary, where appropriate, in italics…

    • 7-Eleven reportedly plans to open as many as 1,000 new stores in the US next year, requiring an investment of $2.5 billion that also will be used to revamp existing stories. Analysts say this reflects a shift from recent investments, which were more focused on operations and systems.

    You know where I stand on the whole efficiency vs. effectiveness debate. But what I’m really interested in seeing is how these new stores might reflect the new definition of convenience that Tesco may be bringing to US shores. Not that Tesco is the be all and end all, but its influence may go beyond its store count.

    • The Wall Street Journal reported that in a development that reflects greater interest by the nation’s governors in the impact of big box retailers, “Maine Gov. John Baldacci … signed into law a measure requiring developers of retail stores exceeding 75,000 square feet to conduct studies gauging the project's impact on municipal services, the environment and local businesses. The proposed store can't be approved if the studies find it is likely to cause a quantifiable, ‘undue adverse impact’ on more than one of those fronts and is expected to have a harmful effect on the community overall.

    “The Maine legislation is the first state law of its kind in the U.S., but similar measures have been proposed in six other states in the past two years. A bill made it through the California State Legislature last year but was vetoed by Gov. Arnold Schwarzenegger. Another measure is under review in New Jersey.”

    While I’m not in favor of protectionism in general and think that (as I’ve written ad nauseum) “compete is a verb,” I’m not sure this is a bad idea. I think it is in every community’s best interests – whether that community is as small as a hamlet or as large as a country – to find out whether the dominant forces in the economy are having a positive or negative impact on overall community conditions.

    In fact, I’ll go one step farther. I think that communities that do not sit in judgment on such things aren’t doing their jobs.


    • The Los Angeles Times reports that US regulators “slapped a highly unusual hold on shrimp and certain fish from (China) after tests showed contamination from potentially harmful drugs.

    “The Food and Drug Administration said it would block all shipments from China of farm-raised shrimp, catfish, eel and two other kinds of fish until importers can produce independent test results showing the items to be free of drugs banned in U.S. fish farming.”

    At some point, “Made in China” turned into a warning label. Though I have no doubt that the Chinese government is trying to catch up with these stories and change both perception and reality, right now it is losing the battle.

    • The Container Store sold the majority of its stock to private investment firm Leonard Green & Partners.

    Memo to Leonard Green & Partners: I like The Container Store. A lot. Don’t screw it up.

    MSNBC reported that a new study by the Tufts-New England Medical Center in Boston says that on average, most people who go on diets tend to lose between 10 and 15 pounds no matter what technique or system they use…and then put it all back on within five years.

    As the great Charles McCord once said, the reason there are so many diet books on the best seller lists is that the ones that used to be there didn’t work.

    And by the way, have you seen all the stories suggesting that McCord’s old boss, Don Imus, may be coming back to radio by fall? I hope so … in part because I hope he is able to provide some dialog and context on the race issue that will address the reasons he lost his job to begin with (because nobody else in the major media is having the discussion), and in part because I just plain miss him in the morning.


    The Indianapolis Business Journal reported that the mood at Marsh Supermarkets is upbeat – the best it has been since the company was acquired by Sun Capital Partners amid charges that the Marsh family was guilty of abusing its management role.

    The reason: “A chain-wide effort to upgrade stores and win back loyalty from customers and employees. CEO Frank Lazaran said the chain has launched a campaign to remodel 70 percent of its grocery stores within a year and rebrand every one of them,” according to the Journal.

    • Wesfarmers Ltd., Australia's largest hardware chain, has agreed to buy retailer Coles Group for the equivalent of $17.7 billion (US) in cash and stock.

    Based on what I was seeing, wasn’t this a matter of Wesfarmers being the last man standing?

    • The New York Times reported that US Congressional Democrats believe that they may finally have the votes to gain enforcement of the nation’s Country of Origin Labeling (COOL) law, which so far has been avoided through artful maneuvering both by the nation’s food industry and its supporters on Capitol Hill.

    Like it or not, COOL is going to happen. And the momentum to make it happen increases every time a new story runs about tainted ingredients from China or other foreign countries.

    • The Dallas News reported that Germany-based Aldi plans to enter the Texas marketplace with 25 to 35 stores in Dallas-Ft. Worth by the end of 2009

    • Jim Demme, former CEO at Bruno's Supermarkets, has been named chairman at New Jersey-based Kings Super Markets.
    KC's View:

    Published on: July 9, 2007

    I got several emails regarding the MNB story about a study from the Economic Policy Institute (EPI) charging that Wal-Mart’s purchase of products from China has helped to contribute to a trade deficit with that country of $233 billion, with Wal-Mart’s imports alone accounting for $27 billion. EPI also says that Wal-Mart’s purchases from China alone led to the loss of close to 200,000 jobs in the United States between 2001 and 2006.

    One MNB user wrote:

    Wal-Mart certainly doesn't need me to defend them (nor am I predisposed to do so). That said, the brief report on Wal-Mart's contribution to the country's annual trade deficit, brought about by its extensive imports from China, is simply just one side of the sword here. Most if not all economic contexts involve two or more parties trying to agree on something where their individual self interests do not coincide, and in such a context, the better one side "does" in the negotiation, generally speaking, the worse the other side "does." Labor-management negotiations, for example. Here, although Wal-Mart may well be a significant single factor in the US' large trade deficit, consumers "voted with their pocketbooks" to bring about this result, that is, they went, out of their own free will, and purchased these massive quantities of Chinese-import products, ostensibly in the belief that such purchases were optimal for their personal life situations. No one coerced a consumer to make any of these purchases. Collateral damage: loss of 200,000 US jobs (to China); those 200,000 workers "lost" while the many consumers making these import-good purchases (and Wal-Mart itself, of course) "won" via, presumably, a product-price-value index they considered to be optimal.

    Reverse the scenario: retain the 200,000 US jobs, reduce (at least partially) the Chinese import total, and these US consumers "lose" by now being unable to procure these products at the same product-price-value index. They "lose" whereas the 200,000 jobs not lost "win." It's always more gray than black & white in these economic contexts, and to ultimately say what's best for all considered seems most likely to be more of a personal value judgment, replete with personal biases, than any objectively derived, incontrovertible fact.

    For every winner, there's a loser in the economic arena; in the end, maybe "balance" is a good thing to shoot for: everyone wins some, loses some, rather than some always win, some always lose. Lawmakers: heads-up: there's a policy initiative in there somewhere!


    Maybe, but it all sounds too nuanced for the political or government arena. But that may just be my latent cynicism speaking.

    Another MNB user wrote:

    I realize it is Wal-Mart beat BUT it is most interesting that the banks, the airlines, the hotel chains, the mortgage companies, and our Congress have sent far more jobs overseas than Wal-Mart has.

    Y’think?




    Regarding another recent MNB story, a member of the community wrote:

    Gee...Safeway is being asked by Congress to defend their practice of selling meat treated with carbon monoxide. How about calling in the FDA who approved the practice and the companies who provide the carbon monoxide equipment to retail? It wasn't Safeway or any other retailer who dreamed up this method for preserving meat. While I'm fortunate to work for a retailer that doesn't use carbon monoxide on meat, I don't think that Congress should put retailers on the firing line for using a technique that was approved by the country's supposed authority on the matter.

    Agreed.



    One recent MNB story mentioned that Target has thus far avoided self-checkouts, which led one MNB user to observe:

    If you look at Target's average sales-per-store annually, and compare it
    with Wal-Mart or some other stores, you'll realize why Target doesn't have self-checkouts. They aren't needed. I was in a Target recently while doing some editorial research and found 3 out of 30 checkouts in operation, but no customers at any of them. At a Wal-Mart within minutes of the Target visit, nearly a dozen, plus the
    self-checkouts.





    Finally, in my Thursday radio commentary before leaving on vacation, I opined:

    I don’t understand how Salmon of the Americas can send out a press release saying, in essence, that the reason that 13-year-old Evan O’Dorney won the recent National Spelling Bee is because he eats fish – especially salmon – before every competition.

    Give me a break.

    First of all, hasn’t this kid been exploited enough? I get the feeling when I see events like the National Spelling Bee … that the main reason the kids are there is because their parents want them there…that if they had a choice, they’d be out playing stickball or shooting hoops or playing video games or hanging out down at the malt shop. (Okay, maybe not playing stickball or hanging out at the malt shop…but you get my point.)

    I just have trouble believing that poor Evan sits down for a nice salmon meal before he starts a spelling bee. What seems more likely is that his parents – and the folks trying to sell more salmon – saw a nice promotional tie-in here and decided to make some money…

    Be careful, Evan. Today it’s the National Spelling Bee, but with these kinds of endorsements and promotion deals, it won’t be long before you’re out clubbing with Lindsay Lohan and Paris Hilton, and having the tabloid newspapers go through your trash looking for odd misspellings that can be exposed to the world.

    It is a slippery slope.


    One MNB user thought that maybe we were a little tough:

    Just a quick note from someone who's proud of her inner geek.

    I was the school Spelling Bee champion for all four years I was eligible -- county runner up three of those years, and county champion my last year. I ended up being 19th in the state, falling on the word "fallible", ironically.

    All of it was by choice -- I was (and still am) a crummy athlete, clumsy and accident prone. There really weren't any other extracurricular activities in those days (cough-- the early 70s) as I was raised in the farmlands of the Midwest, and everyone lived a long way out of town.

    But I could spell. It was one thing I did really, really well, and no one ever coerced me into competing in the bees -- I wanted to sign up the very first time I ever heard about it. My parents didn't push -- if anything, they bent over backward to let me do something I wanted to do -- my mom came on Fridays to pick up me and the enormous unabridged dictionary that the school let me take home with me over the weekends to study. My folks would spend the entire weekend picking random words out of the dictionary for me to spell, and I didn't want to stop, even for meals or to sleep. When they had to stop to do other things (trivial stuff like cooking or something!) I would page through that huge dictionary, literally reading every word on the page. Nearly every other kid I talked to during those long, long bees was there for the same reason I was -- we enjoyed being able to compete at something we did well and might be able to win.

    Not every kid who spells is doing it because they've been pushed into it -- more of the "there's something for everyone".


    Fair enough.

    I’ll admit to being fallable on this one. (And many others.)
    KC's View:

    Published on: July 9, 2007

    At Wimbledon, it took five sets for Roger Federer to beat Rafael Nadal - 7-6 (7), 4-6, 7-6 (3), 2-6, 6-2. Federer and Bjorn Borg are the only two men in the last 100 years to win Wimbledon five times in a row.
    KC's View:

    Published on: July 9, 2007

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    KC's View: