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    Published on: July 25, 2008

    The Boston Globe reports this morning that Ahold-owned Stop & Shop has filed a lawsuit against Whole Foods, “accusing the high-end grocer of violating its trademark by using ‘The Real Deal’ in its marketing efforts.”

    According to the story, “Stop & Shop Supermarket Co. and its sister grocery chain, Giant Food, recently launched a Real Deal advertising campaign in stores and promotional programs to identify ways for consumers to save money as the costs of gas, food, and other products continue to rise. Three weeks later, Stop & Shop alleges, Whole Foods Market Inc. began using ‘The Real Deal’ trademark in a blog where staff and customers post money-saving tips, in a quarterly guide featuring specially priced items, and through weekly value-shopping tours which feature employees showing customers how to shop economically. Whole Foods also has in-store signs, labeled ‘Real Steal,’ identifying specially priced items.”

    Stop & Shop is asking the courts “to order Whole Foods, based in Austin, Texas, to shut down its Real Deal blog and destroy all signs, labels, prints, packages, wrappers, receptacles, brochures, and advertisements bearing the Real Deal mark.” Whole Foods is reviewing its options and next steps, according to the story.

    KC's View:
    Normally, one wouldn’t ever confuse Stop & Shop with Whole Foods. And that isn’t a slam on Stop & Shop…it is hard to imagine Whole Foods being able to convince people that its nickname, Whole Paycheck, isn’t deserved.

    Why would it want to?

    Though clearly Whole Foods is working the issue hard. Ironically, today’s Austin American-Statesman has a story this morning noting that in an effort to bring in value-minded consumers during times of economic stress, “Whole Foods launched a newsletter, ‘The Real Deal,’ with coupons and tips to help customers stretch their grocery budget further. The natural foods chain even offers tours, led by a ‘value guru,’ to help shoppers on a budget navigate its two Austin stores.”

    I have no idea how the court case will turn out. But I think it fair to say that the bigger challenge to Whole Foods in this area won’t be legal.

    Published on: July 25, 2008

    The Wall Street Journal has a piece this morning in which it notes that a new study by research firm Merchant Medicine suggests that for the first time in years, the number of in-store health clinics has decline din the US, from 981 to 969.

    Part of the problem seems to be initial business losses that are weeding out some of the players in the field.

    However, the Journal reports, “retailers who back clinics in their own stores are more willing to endure the initial losses that go with setting up the clinics. And the continued expansion by retailer-owned clinics is likely to mean overall growth in the field will continue. Walgreen, for example, plans to add hundreds of company-owned in-store clinics by the end of the year.”

    KC's View:
    I continue to believe that in-store medical clinics are a play that make long-term sense because they allow retailers to make the connection between food and health maintenance in new and innovative ways. Sure, there will be some fluctuation in the numbers…but this is a long-term trend that could have a real impact on how health care is delivered affordably in this country.

    (Once again, I urge you to check out the report on food and health developed by the Coca-Cola Research Council.)

    And, I also think we have yet to see the real innovation in this segment. And when it comes, the announcement will come from Bentonville, Arkansas.

    Published on: July 25, 2008

    The Atlanta Journal-Constitution reports that Georgia plans to challenge the Food and Drug Administration (FDA) call for all jalapeño peppers to be taken off store shelves because of concerns that they are the source of the current salmonella outbreak that has sickened more than 1,200 people in 47 states.

    State Department of Agriculture Commissioner Tommy Irvin said yesterday that he has sent inspectors to collect jalapeño pepper samples from the Georgia farms that produce them, and if the results show that they are salmonella-free, he will ask supermarkets to put Georgia jalapeño peppers back on store shelves.

    "I don't want to be too harsh on Food and Drug, but we think that they're overreacting," Irvin tells the paper.

    FDA said that all raw jalapeño peppers and Serrano peppers should be pulled from shelves and discarded, regardless of origin, after it found a single contaminated pepper that came from Mexico in a Texas distribution center.

    FDA has not yet responded to the challenge from Georgia.

    Results from the Georgia testing are expected to be available by Monday at the latest.

    KC's View:
    There seems to be such rampant dissatisfaction with FDA these days that it seems completely reasonable that companies and state governments may start challenging them.

    However, there may be more than enough blame to go around. Interesting piece carried in the Washington Post this morning suggesting that as stories about foodborne illnesses continue to make headlines, some of the fault may be directly attributed to the food industry.

    “The industry pressured the Bush administration years ago to limit the paperwork companies would have to keep to help U.S. health investigators quickly trace produce that sickens consumers, according to interviews and government reports reviewed by The Associated Press.

    “The White House also killed a plan to require the industry to maintain electronic tracking records that could be reviewed easily during a crisis to search for an outbreak's source. Companies complained the proposals were too burdensome and costly, and warned they could disrupt the availability of consumers' favorite foods.

    “The apparent but unintended consequences of the lobbying success: a paper record-keeping system that has slowed investigators, with estimated business losses of $250 million.”

    Published on: July 25, 2008

    Both the New York Times and the Los Angeles Times have had stories in recent days about Starbucks stores in their markets that are closing. Some excerpts…

    From New York Times, about a store closing in Newark:

    “When a Starbucks opened on Broad Street here almost eight years ago, it was not seen as a bland new spigot of a corporate coffeepot, but as a gathering place whose very existence would have seemed impossible a decade before, a symbol of a knocked-down city’s attempts to get up … So when Starbucks announced last week that the Broad Street branch would be among the 600 stores that the coffee company is closing around the country, the reaction here was especially emotional, a mixture of anger, disappointment and frustration … The closings of hundreds of the coffee chain’s branches have certainly caused consternation in other places. But the cafe in downtown Newark is in some ways unique, a high-profile sign to all the people who fear the city that life is normal — if one accepts that part of ‘normal’ is the ability to buy a slightly expensive cup of coffee and a scone in the morning.”

    And, from the Los Angeles Times:

    “Starbucks is about more than a cup of coffee in many neighborhoods. That block-letter logo on a strip mall marquee can be considered a public stamp of approval, a symbol of hope, a suggestion of brewing economic vitality.

    “That's why a new Starbucks in the inner city tends to produce the kind of excitement that suburban neighborhoods reserve for the debut of a Bloomingdale's.

    The two South Los Angeles Starbucks on the closure list are fairly new, comfortable and sleek. Both -- one at the corner of Martin Luther King and Vermont; the other a few miles away on Crenshaw and Vernon – are products of a collaboration with another marquee name, Magic Johnson, and his economic development company … The losers are those loyal customers who considered it a privilege to join the cultural mainstream, sipping overpriced Frappuccinos. For them, losing the neighborhood Starbucks is a rebuke that stings.”

    "’It's a comfortable place. A safe place," says one local resident and customer. ‘And a chance for us to have access to luxury. Just like everybody else’.”

    KC's View:
    Starbucks has issued a statement saying that it is “humbled” by some of the reactions to the 600 announced store closings, especially in inner city neighborhoods. And it should be.

    Rudyard Kipling once said that “a woman is only a woman, but a good cigar is a smoke.” Sometimes a coffee shop is just a coffee shop…but sometimes it is something more. Something compelling. Something that matters.

    If those stores aren’t making money, there’s no reason for Starbucks to keep them open. And the current economic climate offers plenty of good reasons for the company to move swiftly and decisively to become more profitable.

    But…it is at least worth considering the broader implications here. The notion that a coffee shop can be about more than a cup of coffee….that speaks eloquently about the role of retail in communities, and perhaps even of a higher calling than just making money. Sure, the bottom line is important and black ink is better than red ink.

    It seems to me, though, that the goal to “be something more” should be factored into every store’s operating plan, no matter where that store is or what the demographics are of the customers who shop there.

    Published on: July 25, 2008

    An Ohio law firm has filed a product liability lawsuit against Kroger in connection with the recent E. coli outbreak connected to beef sold by the retailer. The lawsuit was filed on behalf of a Pickerington, Ohio, resident who purchased ground beef from a Kroger store in the Columbus area and subsequently contracted E. coli poisoning from the contaminated beef, which has been recalled by Kroger.

    Nebraska Beef has been identified as the supplier of ground beef products linked to E. coli illnesses in Michigan and central and northern Ohio. The illnesses were reported between May 31 and June 8. Nebraska Beef is recalling nearly 532,000 pounds of ground beef produced in the last two months because the meat has been linked to an outbreak of E. coli illnesses. Much of the beef that Nebraska Beef is recalling was sold to wholesalers or other processing companies, so it may be difficult for consumers to determine if they have any of the beef.

    KC's View:

    Published on: July 25, 2008

    • The Financial Times reports that Walmart, long anti-union in the US, “has completed collective bargaining agreements with unions in two Chinese cities.” The story notes that the retailer was under pressure from the government to make the deals, since the unions are actually government-approved.

    However, FT also notes that “the agreement in Shenyang locks in an 8 per cent pay rise both this year and next for Wal-Mart employees, a company spokesman and union officials told the Financial Times on Thursday. By comparison the average hourly wage in Wal-Mart’s US stores, which are not unionised, has risen 12 per cent since January 2005, from $9.68 to $10.86 … Employees in Quanzhou, who formed the first Walmart union in August 2006, secured a similar increase in an agreement signed on Wednesday. More than 48,500 people work at 105 Wal-Mart stores across China. All have been unionised over the past two years and their representatives are negotiating collective contracts with management.”

    KC's View:
    I read about Walmart making union deals, and I can't help but think of this exchange from “Ghostbusters” (1984)…

    Dr. Peter Venkman: “This city is headed for a disaster of biblical proportions.”

    Mayor: “What do you mean, ‘biblical’?”

    Dr. Ray Stantz: “What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.”

    Dr. Peter Venkman: “Exactly”

    Dr. Ray Stantz: “Fire and brimstone coming down from the skies! Rivers and seas boiling!”

    Dr. Egon Spengler: “Forty years of darkness! Earthquakes, volcanoes...”

    Winston Zeddemore: “The dead rising from the grave…”

    Dr. Peter Venkman: “Dogs and cats living together…mass hysteria!”

    When Walmart makes deals with unions, there’s something strange in the neighborhood…

    Published on: July 25, 2008

    • The Washington Post this morning reports that Maryland State Sen. Ulysses Currie was paid more than $207,000 over five years by Shoppers Food and Pharmacy, owned by Supervalu. According to the Post, “Interviews and documents released since the investigation became public have showed that Currie repeatedly intervened in matters of interest to Shoppers.”

    Currie has not yet been charged with any crime, though the FBI is investigating his work as a consultant for Shoppers and whether he used his public office to benefit the company.

    Reuters reports that the European Food Safety Authority, the food safety agency that services the European Union, is maintaining that meat and milk from cloned animals and their progeny are not safe to eat – which is a shift from the agency was expected to say.

    In the US, government regulators have said that so-called “cloned food” is safe to eat.

    Advertising Age reports that McDonald's “is determined to tweak its dollar menu until it's profitable,” even if that means raising prices beyond the dollar threshold.

    According to Ad Age, “The fast-feeder has faced increasing pressure from its usually docile franchisees, some of them accusing the company of driving traffic at the expense of their margins. There has also been some pushback about new-product giveaways.”

    • The Washington Post this morning reports that the US Environmental Protection Agency (EPA) announced yesterday that “it will no longer allow residue of the toxic pesticide carbofuran on domestic or imported food, a decision that would effectively remove the chemical from the U.S. market. EPA officials said they made the decision - which surprised environmentalists as well as the pesticide's sole U.S. manufacturer - on the grounds that the chemical residue poses an unacceptable safety risk to toddlers.”
    KC's View:

    Published on: July 25, 2008

    will return.
    KC's View:

    Published on: July 25, 2008

    It has been interesting to read this week about the new partnership between and TiVo that will in essence create an Amazon-driven shopping channel that will be available to people on their television screens if they subscribe to the TiVo digital video recording (DVR) service.

    The initiative is called “Product Purchase,” and it is designed to allow consumers to buy products associated with programs they watch on TV; it is considered especially timely because so-called “product placement” – which has sponsored items showing up in programming without it being identified as a paid-for positioning – is becoming more and more popular.

    As my friend Glen Terbeek says, this goes a long way toward closing the gap between creating demand and fulfilling demand…and toward creating what he likes to call a “frictionless marketplace.” Retailers and manufacturers that are not part of this continuum run the risk of becoming irrelevant, and so must pay attention to where this trend is headed.

    While I admire the technology and the implementation, I have to say that I’m less than thrilled with the whole notion of product placement. I was watching a recent episode of “Burn Notice” that was sponsored by Saab…and there was, toward the end of the program, a completely gratuitous mention of the car brand that included a character saying nice things about Saab convertibles.

    Now, I may be in the minority on this…but I don’t think that American consumers are that stupid. They’re going to be able to see what is going on, and some of them – me included – are going to be annoyed.

    I recognize that DVR technology and the downloading of commercial-free programs onto iPods make it easier for consumers to skip past commercials…which forces marketers to think of new ways to reach target audiences.

    But annoying us isn’t going to cut it. Not by a long shot.

    The two movies I saw this week couldn’t have been more different, and I loved them both. Interestingly enough, they both sought to stretch the limits of their genres…and were spectacularly successful.

    “The Dark Knight,” which is the newest Batman movie starring Christian Bale as the Caped Crusader and the late Heath Ledger as The Joker, was unlike any so-called “comic book” movie that I’ve ever seen. In fact, it didn’t resemble movies such as ‘Superman” or “Spider-Man” so much as it reminded me of “The Untouchables,” or some sort of great Michael Mann-directed crime thriller. Maybe some of that is because Chicago – where “The Untouchables” was shot, and maybe it is because director Christopher Nolan seemed to capture some of that dark energy that Mann uses so well.

    Doesn’t matter, really. “The Dark Knight” is actually about making moral choices in an immoral world – and the stuff about costumed crimefighters and theatrical criminals is just so much window dressing. Great window dressing, to be sure – the Batman mythology is in good hands, and the movie goes right to the heart of the comic books I grew up loving. It is really a movie with a simple structure – The Joker is an agent of chaos, who through his perverse actions works to get people to make immoral choices. And Batman…who in his own way may be just as insane as The Joker, though he puts his madness (who runs around in a Batsuit fighting crime, anyway? To far better use. And yet, Batman and many of the citizens of Gotham are forced to make choices throughout the film that illustrate the notion of situational morality. And, at every turn, they must answer the question: Do the ends justify the means?

    I loved it.

    The other movie that I saw last week – and utterly adored - was “Wall-E,” the Pixar animated film that has captured so many people’s imaginations.

    “Wall-E,” in case you don't know, takes place on Earth 800 years in the future, where a small robot wanders a big city cleaning up the enormous piles of garbage left there by humans…who actually abandoned the planet 700 years earlier because the various kinds of pollution had made it unlivable. Wall-E seems to be the last of his kind, and he has evolved into a sentient being…he collects things that fascinate him, he has as his only friend a small but cute cockroach, and he even falls in love after a fashion when a probe – Eve – is sent back to Earth to see if life there has become sustainable.

    Thousands of light years away, a giant ship carries the descendents of the people who wrecked and then abandoned Earth…and they have devolved into fat, lazy creatures who do almost nothing for themselves while being carried everywhere on floating reclining chairs.

    I don't want to give away too much here, because the way in which Wall-E, Eve and the human beings find each other and a common purpose is both imaginative and ingenious. But suffice it to say that “Wall-E” manages to include social commentary about the obesity crisis and sustainability within the framework of an animated fairy tale that is charming and entertaining.

    And for those who think that the message of ‘Wall-E” will go over kids’ heads…forget it. I took my seven-year-old nephew, and he completely got it. And we can only hope that others of his generation are as smart…because maybe they’ll take the underlying message of “Wall-E” seriously and save us from that particular fate.

    I’m not real worried about The Joker destroying the human race anytime soon. Obesity and pollution, on the other hand, seem like very real problems. Kudos to Pixar for addressing them in such entertaining and, yes, sustainable fashion.

    I have to admit that I’ve pretty much given up on Don Imus. Since he came back to radio after having been fired for making racist comments about the Rutgers University women’s basketball team, there have been two reasons not to listen to him – one is that most of the good guests seem to be appearing elsewhere, and the other (and maybe the more important one) is that his new radio station, WABC, tends to have a weak signal where I live, and the Internet streaming is hit and miss as well.

    But the good news is that I’ve really begin to enjoy “Morning Joe,” the program that replaced “Imus in the Morning” on MSNBC. The cast is great – headed by Joe Scarborough, and ably assisted by the fabulous Mika Brzezinski and Willie Geist. The guests are terrific and from all political persuasions and venues, and it feels like a great radio show rather than three hours of standard morning television. For me, “Morning Joe” works because it is all about good information, lively conversation and healthy irreverence.

    Of course, it isn’t Tony Kornheiser…but since I now have to wait for “Monday Night Football” to be over…or for Mr. Tony to be fired from that broadcast…to listen to him on a daily basis, “Morning Joe” will have to do. And if you’re looking for something to help you walk up in the ayem, “Morning Joe” on MSNBC is a solid option.

    Have a couple of excellent wines to suggest to you this week:

    • 2006 Kumeu River Sauvignon Blanc, from New Zealand
    • 2007 Fritz Winery Sauvignon Blanc from California’s Russian River region

    Both are wonderful for hot summer nights (or days), and seem to get better with each sip.

    That’s it for this week. See you Monday.


    KC's View: