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    Published on: August 13, 2007

    Good column in the Rocky Mountain News about Whole Foods’ proposed acquisition of Wild Oats, and one that actually reflects an opinion expressed here on MNB last week. The column suggests that “Whole Foods CEO John Mackey ought to send Kroger CEO Dave Dillon a couple of dozen organic red roses,” noting that even as Whole Foods tries to explain to a federal court that it won’t have an unreasonable monopoly in organic and natural foods when it acquires Wild Oats, Kroger comes along “with an announcement Wednesday that it's boosting its organic offerings to better compete with natural-foods grocers.”

    The News writes, “Kroger didn't get to the top by misreading trends. Organic foods may have comprised less than 3 percent of total food sales in 2006, but annual percentage sales growth has been in the high teens for the past decade, and posted 22 percent growth last year … Kroger's move bolsters Whole Foods' merger prospects. Those prospects were badly damaged by the FTC's revelations of Mackey's internal emails and online postings. One e-mail to board members said that buying Wild Oats would allow the company to "avoid nasty price wars." That one could literally prove to be a deal-killer, but if the judge rules against the FTC, Mackey certainly has Kroger to thank.”

    One other salient point made by the News: “The Natural Marketing Institute says 53 percent of organic shoppers purchased their goods at traditional grocery stores last year, making them - not Whole Foods or Wild Oats - the leading source of organic products.”
    KC's View:
    : If the Federal Trade Commission (FTC) gets its way, it will be interesting to see if Whole Foods appeals. If it can, I would expect that it would … because suggesting that such a merger creates an anti-competitive monopoly just seems patently ridiculous.

    And, as numerous MNB users have pointed out, how does the FTC prevent a Whole Foods-Wild Oats combination, but then allow A&P to buy Pathmark and News Corp. to buy the Wall Street Journal? Both of those deals seem far more anti-competition to me that what Whole Foods is proposing.

    Published on: August 13, 2007

    The Wall Street Journal reports this morning that three different consumer groups - the Consumer Federation of America, the American Antitrust Institute and the Organization for Competitive Markets – have filed a brief in federal court siding with the Federal Trade Commission (FTC) in opposing the $565 million acquisition of Wild Oats by Whole Foods on the grounds that such a merger would be anti-competitive.

    According to the story, “The consumer groups said that, without the acquisition, Whole Foods and Wild Oats would expand and compete more aggressively with each other, providing a benefit to shoppers.”
    KC's View:
    It seems to me that one of the reasons that Wild Oats is in play is that it was not able to compete effectively with Whole Foods. If this acquisition does not go through, it seems pretty clear to me that Wild Oats will probably end up being sold to another company or companies.

    Published on: August 13, 2007

    The Seattle Times reports that consumers will begin to see Dunkin’ donuts packaged coffee on the shelves of stores such as Costco, Wal-Mart and Kroger this month, compliments of a distribution deal with Procter & Gamble. The move “is a bid to get customers to brew the brand at home, not just get it at Dunkin' outlets,” according to the story.

    Details of the distribution deal are scheduled to be announced today.
    KC's View:
    Okay, I’m going to sing the same sold song, one more time…

    Here’s the interesting sentence from the story:

    “The distribution deal with Procter & Gamble is also about introducing the New England-bred brand to new customers in the West and South where Dunkin' is expanding, with plans to triple U.S. stores to 15,000 by 2020.”

    In other words, both Dunkin’ and P&G are using supermarkets are a kind of billboard through which Dunkin’ can get greater visibility for its new coffee-and-doughnut shops.

    At the risk of annoying people who disagree with me on this issue, if you are a retailer I would point out to you that every doughnut sold by Dunkin’ Donuts in your marketplace potentially is a doughnut that you are not going to sell.

    Which is why I think that supermarkets, which ought to be in the share of stomach business, ought to think twice about carrying brands that essentially hype their competitors. Such deals may lead to short-term dollars, but long-term obsolescence.

    Published on: August 13, 2007

    The Grand Rapids Press reports on how “Meijer Inc. plans to move forward with the ‘right people’ now that it has let go 500 department managers in its 180 stores throughout the Midwest.”

    According to the story, Meijer senior management interviewed more than four thousand managers at its supercenters in Michigan, Ohio, Indiana, Illinois and Kentucky over the past month as it looked to “determine the best use of personnel and to restructure work responsibilities.” The evaluation only included store and departmental managers, and not headquarters personnel and hourly staffers.
    KC's View:
    As tough as this is on the 500 people who lost their jobs, the unfortunate truth is that this is hardball – every store in every market has to work on the premise that every customer and every transaction is in play. That means working doubly hard to keep the customers and sales you have, and even harder to attract new people into the store.

    I just hope that in addition to the 12 percent of store and departmental managers who were let go, the people who remain are being given the motivation and wherewithal to truly be innovative and aggressive. Just making cuts isn’t enough…my experience is that retailers generally only create differential advantages through addition and multiplication, not subtraction and division.

    Published on: August 13, 2007

    People for the Ethical Treatment of Animals (PETA) reportedly has filed a shareholder resolution against Costco Wholesale, asking that the company disclose what it has done to evaluate “controlled atmosphere killing,” which generally is considered to be a less cruel way of slaughtering poultry. PETA says that Costco has not made public its animal welfare policies, and that Costco is selling “tortured, crippled chickens who are scalded to death,” according to PETA Vice President Bruce Friedrich.

    PETA reportedly owns 65 shares of stock in Costco, which allows it to file shareholder resolutions such as this.
    KC's View:
    First of all, just to be clear about this, I want to say that I’m not in favor of torturing and crippling chickens that are scalded to death before they are defeathered and sold to be cooked and eaten. If they can be gently put to sleep before they are defeathered, packaged, cooked and eaten, all the better.

    But here is where I have a problem with PETA. It is the organization’s use of pronouns.

    PETA Vice President Bruce Friedrich talks about chickens “who” are scalded to death.

    Last time I checked the old stylebook, “who” was a pronoun reserved for actual people. Not animals.

    I’m not saying that PETA is wrong on this, or that chickens ought to be tortured. Far from it. I just think we have to keep our pronouns straight – an “it” is an “it,” and a “who” is a “who.”

    Published on: August 13, 2007

    • BJ’s Wholesale Club posted July sales that rose six percent to $650.5 million from $613.9 million a year earlier, on same-store sales that were up 1.5 percent. Second quarter sales rose by 8.2 percent to $2.25 billion, on same-store sales that were up 3.7 percent.

    • Target Corp. reported that its July same-store sales were up 6.1 percent and total sales rose 11 percent to $4.36 billion.

    • Family Dollar Stores said that its July sales rose 3.3 percent to $491.7 million, with same-store sales that were up 0.5 percent.

    • Dollar Tree posted Q2 sales of $971.2 million, a 9.9 percent increase over the same period last year. Same-store sales for the quarter increased 4.4 percent.

    KC's View:

    Published on: August 13, 2007

    • Services were held over the weekend for James Forkin, 80, long time grocery industry executive, who passed away last week after suffering multiple strokes. After years as Vice President of Sales for Sara Lee, James founded Cleveland food brokerage, Buckeye Sales & Marketing in 1975. Starting the brokerage with just the Sara Lee Line and three employees, Jim built Buckeye Sales into a nationally recognized brokerage firm for representation in Northeast Ohio.
    KC's View:

    Published on: August 13, 2007

    Last week, MNB noted a New York Times story about a new study suggesting that as people get heavier, their tolerance for being heavy gets greater.

    According to the story, “Economic researchers from Florida State University and the Federal Reserve Bank of Boston found the weight of the average woman rose by or 13.5 percent between 1976 and 2000 -- but their ideal weight also edged up.

    “In 1994 the average woman tipped the scales at 147 pounds but she wanted to weigh only 132 pounds -- but less than a decade later the average woman weighed 153 pounds but said her desired weight was 135 pounds.”

    The Times< notes that these study results are in line with previous reports suggesting that “87 percent of Americans, including 48 percent of obese Americans, believed their body weight fell in the ‘socially acceptable’ range.”

    My comment: I have two questions.

    One: Why are economists looking into these issues? (Will nutritionists next be issuing reports about the nation’s economic health?)

    Two: What does “socially acceptable” mean, and why does it matter in the scheme of things? I know thin people who I think are socially repugnant, and heavy people who are delightful. Isn’t the obesity issue about health, not social acceptability?


    To which one MNB user who requested anonymity responded:

    Are you really asking why the Fed is researching weight or did you just ask it in jest? If it is the former, I will from now on discount much of your commentary because it implies that you lack some basic foresight and critical thinking skills. This along with the fact that you have already ignored by reply regarding Kevin Murphy's testimony on the Wild Oats acquisition (please, read his bio - if he says prices will go up, then Whole Foods has big problems) are causing my consternation regarding the viability of MNB, the commentary anyway.

    The Federal Reserve Banks regularly study social health issues because it relates to the aging and health of the population and their projections for work longevity, retirement money needs, social security demands, illness rates ... Think about it, studies like these are essential for the government to have an idea about the population demographics in the coming years. A few years back, I had lunch with Harvey Rosenblum - head of research at the Dallas Federal Reserve. We were discussing the current push by Dallas to get into biotech. He stated that he is very interested in getting involved in the biotech community in Dallas because of his interest in how new drugs will impact the longevity of the population and illness rates.

    So, instead of wondering why they are doing a study like this, you should instead be wondering why they are taking such a morbid approach to the current liquidity issues that are crushing our financial markets. To me, that is a topic worth questioning.


    Well, I’m sorry if you don’t like the commentary. To be honest, I wouldn’t go so far as to say that I was kidding when I posed the question about the Fed looking into ideal weights … it was a sort of tongue in cheek comment, but maybe I should have been more serious and less glib. (Hell, they’ll probably put that on my tombstone: “Should have been more serious and less glib.”) You make all good points about the Fed’s priorities, and I appreciate your doing so. And if you think my critical thinking skills aren’t everything they should be…well, you share that opinion with about fourteen nuns, seven brothers, nine priests, several bishops, a couple of college professors and more than a few of my relatives.

    I would, however, like to use this opportunity to make one broader policy point about MNB. Sometimes people ask how I choose the emails that run, and what the criteria is.

    The answer is that there isn’t any sort of scientific approach to this. I get hundreds of emails each week, and I read every one of them. I try to choose the ones that I think are interesting, provocative, address a subject that I find intriguing or even confusing, and that move the conversation forward. Or, that just strike me as entertaining or funny. (Make me laugh out loud, and I’ll look for excuses to run your email.) In the beginning, I tried to answer personally all the emails I didn’t post on the site…but the volume has gotten to the point where that just isn’t possible anymore. And I feel bad about that.

    Now, that’s not to suggest that the emails I don’t run aren’t interesting or provocative…just that I have to make choices at some point or MNB starts to read like a Dickens novel. Besides, you all have work to do, and if “Your Views” goes too long, it leaves me less time and space to rant, rave and try to be entertaining.

    If I didn’t run your email about Kevin Murphy and Whole Foods, it wasn’t that I was discounting your email or your opinion; I also wouldn’t have ignored it because you disagreed with me. It probably just slipped through the cracks. I apologize for that. I’m doing the best I can, but I’ll try to do better.




    We had some discussion on the site last week about the use of cloth bags vs. paper and plastic bags, and how to teach baggers to use them correctly. Which led one MNB user to write:

    I remember a few months ago when I was working as a bagger (the fancy word is courtesy clerk) at a Kroger. First off, almost all of our training was done on a computer program we'd have to use about once a fiscal quarter. Keep in mind about 85% of the time we didn't do what the computer said to do, mainly because we didn't care. We were never 'energized' about serving people, we just wanted the money.

    Second, the main thing Kroger kept telling us to do was fill the bag as much as we could while discouraging paper bags and providing great customer service, whatever the heck that meant! Sure the computer would cover some of the basics like putting cold stuff with other cold stuff, but basically the program said put as much stuff in a bag as we could without using paper bags and smile while doing it.

    If they don't upgrade the computers or make employees feel like more that cogs in a machine (or at least sit down and give employees hands-on training) don't expect much change.


    I won’t defend either the training method you describe or the strategies it seemed to promulgate. But I guess what bothers me are the phrases like “we didn’t care” and “we just wanted the money.”

    I agree that retailers need to find new and innovative ways to engage with their employees and make them feel more like partners. But doesn’t an employee have at least the responsibility to care? I’ve had jobs I’ve loved and I’ve had jobs I hated, but I’ve always cared … because caring was a reflection on me, not on my employer.

    I don’t want to be insensitive here. But don’t you have to meet the employer at least halfway?

    MNB user Sarah Owens had a few thoughts:

    Just wanted to let you know I thoroughly enjoy reading MNB every day. I'm originally from Pennsylvania and have moved out to California, where I work for an independent natural food grocery retailer. Your comments supply me with that East Coast sarcasm, that I miss dearly.

    Our stores have been running a program since 1992 that supports using a reusable bag. For every large bag that customers bring in to carry their groceries, they receive an "Envirotoken" worth 5¢. On their way out the door, customers drop the token in the box of one of the six environmental organizations they would like to support. Each month we count up the tokens, convert them to cash, and send the donations to each environmental group.

    Every year we run store elections and have our customers vote on which 6 environmental organizations they'd like to see on the boxes. Those organizations also come out and table as well so the customers can learn more about them and what they are working towards. Over $6,000 has been donated this year. Since the program was launched, $62,000 has been donated and an estimated 1.3 million bags were saved. It's a great idea to gives the customer another reward for using a reusable bag.


    All great ideas.

    BTW, I went out yesterday and bought two more canvas bags to take to the store, for a total of four. I did $200 worth of grocery shopping and it all fit in those four bags, but two small plastic bags. (Normally, it would have taken up at least a dozen or so plastic sacks, maybe more.) So I felt good about it…and I didn’t even need tokens. Sometimes, I guess, virtue is its own reward.

    MNB user Ned Rawn wrote:

    You missed a key point. Here are a couple ideas missed

    Bio-compostable materials are not being manufactured. These materials breakdown within 45-60 days within landfills. They are made from corn-based materials. Until retailers figure out a more green approach to accommodating their customers’ needs, charge X for plastic and/or paper.

    Cutting down more trees is not the answer given the whole green house issue that’s erupted. Continuing down the same path using the same materials spoken of in your article isn’t the answer either.

    To think you’re going to get a mother with 3 kids with an overflowing shopping cart to bring a canvas bag(s) from home is nuts. Now if the retailer wanted to offer canvas bags with the retailer’s logo to their shoppers at a nominal price the retailer could get some serious marketing mileage and positive PR.

    You’ve article was very good and you’ve touched on the tip of the iceberg on the paper vs. plastic issue.


    See, I think that if you tell those mothers that by using canvas bags, they are making the earth better for their kids, many would buy into it. I did, and I’m not even a mom … just an aging cynic.

    I think a lot of people might feel that way after reading the excellent cover story about climate change in last week’s edition of Newsweek.

    Another MNB user wrote:

    I don't disagree with the concern with the whole plastic bag issue, but I do find the legislation recently passed in San Francisco and Oakland curious.

    It seems that we have identified the major grocery chains as the root of the problem. Maybe I missed the fine print in the legislation that was passed, but what about K-Mart? Target? Wal-Mart? What about all the small independents who also use plastic bags?

    Which brings me to another question - who's going to enforce this? Will we have green uniformed, plastic bag police patrolling these major cities?

    It seems to me that this legislation is a little biased, and unless those supporting it make it a widespread, no-tolerance initiative, the problem isn't going to go away simply by punishing the major grocery retailers. They may have the largest share in this problem, but they're certainly not solely responsible.


    I agree. The law ought to encompass everyone. No exceptions.

    Another MNB user wrote:

    I have said “Paper, please” for years at the checkout. Paper comes from trees, a renewable resource. I realized the importance of this after talking to a relative who works at a major grocery chain in Minneapolis. He just laughed at the recycling idea. Their store has a container to recycle plastic bags. When the barrel gets full there, they throw the bags away. So much for being responsible.

    Paper at least decomposes if someone is irresponsible and does not discard the bag properly. Plastic bags hang in trees for years, animals get stuck in them and they are a general nuisance in the environment. (I do, however, prefer them for messy grocery items like meats and wet produce.)


    And still another MNB user wrote:

    You’re always railing on loyalty programs, could a retailer find a twist to provide canvas or some other bag free of charge to their “loyal” customers? Offer a discount of some sort, even trivial to encourage people to bring in their own bags?

    That’s what I’d do.




    I got the following email from MNB user Michael Parker, who is skeptical about Tesco’s US foray:

    I will be shocked if the British invasion succeeds. The arrogance of their leader tells me they are destined for failure. I have spoken with several TJ's people who have interviewed with them and they don't get it. In my 35 years of retail experience, nobody has appealed to the spectrum of US locations and different demographic locations. I'm either an idiot, or they are so superior to US retailers that we will be destroyed. My book is on another failed British invasion.

    Another failed British invasion? The last one was the Beatles…and I think that one pretty much worked.

    But seriously, you could be right, and I could end up being the idiot for believing that the Tesco approach is going to have a tremendous impact in the US.

    But I don’t think so. (Then again, we all know about my critical thinking skills…)




    We had a story the other day on the growth in popularity of raw milk…and I commented that you all can do what you want, but I’m sticking with pasteurization.

    Which led MNB user Tom Kroupa to write:

    So drinking raw milk seems dangerous to you? Believe it or not, It is less dangerous than the legal pharmaceuticals that kill thousands of people every year! This is well known and has been written about in medical journals for many years. And yet I see very few scientists raising the alarm over this fact unless, it’s a drug in which the company who manufactured it had misleading information in their drug trials. This is the reason that the natural health industry evolved: Because mainstream was selling the public foods and drugs that were hazardous to their health. And more people are waking up to that fact day by day. I have been drinking raw milk for many years. Yes the cows are tested every month for TB. I could review the ingredients of the food you eat and may find that the long term affects on your health are less than beneficial and a higher risk than raw milk!

    Again, I could be wrong. But somehow describing pasteurization in such dire terms just doesn’t sound right to me.




    It’s only Monday, but this is already my favorite email of the week, as one MNB user wrote:

    I will start by saying I've been a Giants fan my whole life, and Bobby Bonds was my hero as a kid. Then, I went to ASU, and lived in the same apartment complex as Barry Bonds my freshman year, and his last year before going pro. I later met him when he was a Pirate, and he was very nice to me in all brief encounters (three or four brief conversations). Then, when he was traded to the Giants, done deal for me. Huge fan ever since. That said, maybe my comments are biased, but here goes:

    Your constant bashing of him shows how ignorant you are of his talents. I could care less if you think he's a jerk, and maybe he is. But to go as far as saying the things you've said the past week, and to completely ignore his talent, shows me you've never seen him play in person or haven't watched him play at all. There is NO ONE more feared as a hitter. NO ONE who does it all on the field throughout his career. The home run record is a remarkable achievement, and he is an all time great, whether you like it or not. Any real baseball fan acknowledges the danger and excitement he brings every time he steps into the batter's box.

    I love it that you hate Barry owning the record (for now) and think he ruined the game. Bud Selig was the one who didn't get on McGwire and Sosa when this all began, and he should be blamed. Funny also how you never rip those and other guys, like Palmiero, Clemens, Giambi, Luis Gonzales, etc..., (whose bodies changed from when they were rookies).

    In fact, I'll go as far as saying Barry should have a lot more homers than he has now. In 1994, he had 37 HR's when the strike hit in early August. He was hurt most of 2005. He played in Candlestick Park seven years (notorious for being anything but a homer friendly park. Which is also why I view Willie Mays as a greater home run hitter than Aaron - 755 to 660, yet Mays played 12 years at the Stick, easily worth 10 HRs per year).

    I'll close by saying two things about your Mets:

    1. Always know that the orange part of that Met uniform is a tribute to the Giants (while the blue is to the hated Dodgers), so that should always remind you of Bonds.

    2. If you're against cheating, then start ripping your 1986 Mets. That World Series Championship is a fraud, riddled with MANY COCAINE abusers on that Mets team. That is cheating, that is illegal, and that Mets World Series Championship should have an asterisk next to it.

    Stick to your day job on reporting on the food business, because you obviously don't know a thing about baseball (that, or you let your biases cloud your judgment so much that we, your readers, don't see how knowledgeable you really are).


    First of all, there is no “maybe” about it. You’re biased. So am I. That’s what makes sports so much fun and gives us so much to debate about.

    I never said Barry Bonds didn’t have talent. Far from it. In fact, how marvelous it would have been to watch him assault Hank Aaron’s record without the benefit of steroids. That would have been something, and not only did he deny all of us that excitement, but he denied himself that achievement. And you’re right, he is a tremendously feared hitter – in part because of his natural talent, in part because he’s juiced up his body, and in part because he wears as much armor as a medieval knight, which helps to make throwing inside problematic. (This actually makes a difference, since Bonds is a much better hitter when the ball is over the middle of then plate or outside than when it is inside. The armor allows him to lean over the plate without worrying much about getting hit. If baseball’s powers-that-be had any guts at all, they would have banned all that protective gear years ago. But I digress…)

    You’re certainly right about the fact that Bonds hardly is alone in his abuse of the game. All the players you mentioned deserve criticism and asterisks next to their achievements. And the commissioner’s office, and the owners it represents, deserve an enormous share of the blame – they turned a blind eye to what was happening because the home runs put fannies in the seats and made them money. (Shame on them.) If I singled out Bonds, it was because he was the one in the headlines, he was the one challenging Hank Aaron’s record. Use the juice to help you assault that kind of record, expect to have a bulls eye on your uniform.

    As for the impact of Candlestick Park…tough. You play where you play, and live with the resulting stats. (My recollection is that Bonds moved to San Francisco as a free agent, signing a big contract to go there. He doesn’t get extra points for playing in Candlestick. He went for the money.) You have every right to think that Willie Mays was better than Hank Aaron, just as I have the right to think that Mickey Mantle probably was better than both of them, and would have eclipsed Babe Ruth’s record had he been healthy and taken care of himself. But he wasn’t healthy and he didn’t take care of himself, so he didn’t. And all the “woulda, coulda, shoulda” in the world can’t change that.

    By the way, I’m not anti-Giants, and I’m very aware of where the Mets’ colors come from. My dad was a Giants fan growing up, and remained one until the Mets finally won him over. (Though I have to admit that pressed to choose, I’d always take the old Brooklyn Dodgers over the NY Giants…they just seemed to be more fun, and they had Jackie Robinson, one of the great people of the 20th century. When it comes to achievement and integrity, Bonds isn’t even on the same planet with Jackie Robinson. But again, I digress…)

    You make a legitimate point about the ‘86 Mets. I hate to admit it, because they are my team, but they should not be proud of their behavior that year. But if I’m going to pick on guys for using steroids, I need to be consistent and equally harsh about guys using coke. Frankly, what happened to guys like Doc Gooden and Darryl Strawberry ought to be a cautionary note to anyone thinking about using drugs.

    As for sticking to writing only about retailing … NO WAY! Sure, I can rile people up about things like COOL and banning plastic bags and food safety and other industry issues…but I’m never going to give up the fun of writing about and occasionally annoying people with my commentaries on baseball, books, restaurants, movies, food, beer and wine (not necessarily in that order). This is my day job…and I’m having too much fun to change anything about it.

    KC's View:

    Published on: August 13, 2007

    Food recalls and headlines about food safety issues have become a seemingly weekly occurrence. The question is, to what extent do the recalls and headlines affect consumer attitudes? Are these becoming the times that try consumers’ souls? Or, is their confidence in the safety of the food supply largely unaffected?

    This week, HartBeat offers the results of an online poll examining this question.

    To learn more, go to: http://www.hartman-group.com/products/HB/indepth/mnb/

    KC's View: