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    Published on: September 2, 2008

    The Los Angeles Times reports that the US Court of Appeals for the District of Columbia Circuit has ruled that the US Department of Agriculture (USDA) is within its legal rights to prohibit meatpackers from conducting their own tests for mad cow disease.

    The case stemmed from an effort by Kansas-based Creekstone Farms Premium Beef to test all of its cows and then advertise the fact that these animals had been determined to be free of bovine spongiform encephalopathy (BSE). Larger meatpackers opposed the Creekstone program, saying that it would force them to also perform the expensive testing.

    KC's View:
    Perhaps the legal system is correct when it says that the USDA can prohibit private BSE testing and the listing of those results on meat packaging.

    But what seems incomprehensible to me is why the USDA would want to prohibit such testing.

    Sure, market forces might then compel bigger meatpackers to do the tests themselves. But we’re supposed to be in favor of market forces in this country…and besides, when did it become the USDA’s mission to save big meatpackers from such expenses?

    There are only two probable results from such private testing. One, the consuming public finds out that the nation’s meat supply is just as safe as the government has maintained. Two, it demonstrates that the government has been overly optimistic about the level of mad cow disease in the US, and that more testing and greater vigilance is needed.

    Either way, the consumer wins. In fact, the only way that the consumer doesn’t win is if the USDA gets in the way of market forces and prevents the private testing from taking place. Which, ironically, is what has happened.

    Here’s hoping that Creekstone takes advantage of whatever appeals processes may be available to it, and that common sense and logic are applied to the issue of private BSE testing.

    Published on: September 2, 2008

    The UK’s Independent reports that the United Food and Commercial Workers (UFCW) has filed a compliant with the National Labor Relations Board (NLRB), charging that the 2 Sisters Food Group fired six employees for having attended a union organizing meeting and filing complaints against their managers.

    The catch: 2 Sisters Food Group is a supplier to Tesco’s Fresh & Easy chain in the US, which has been targeted by the UFCW for what it says is an anti-union approach to management. The supplier reportedly has committed $60 million to building a facility adjacent to Tesco’s California distribution center.

    According to the Independent, a 2 Sisters Food Group spokesman said that the company “vehemently denies it has violated in any way US labour law. Specifically, it has not terminated the employment of any employee for union activity and has not engaged in intimidating tactics."

    KC's View:

    Published on: September 2, 2008

    The Gulf Coast seems to have largely dodged a bullet over the weekend, as Hurricane Gustav did not devastate the region to the extent that some had predicted, avoiding a repetition of the events that accompanied Hurricane Katrina in 2005.

    However, even as Gustav lost its power and was downgraded, news reports emerged about as many as three new hurricanes that could hit the US within a week.

    Interestingly, the Wall Street Journal reported over the weekend that Walmart, which became an example of how to effectively deliver relief aid during Hurricane Katrina (as opposed to how the federal government did it), was in “full swing” as it prepared for the landfall of Hurricane Gustav on the Gulf Coast.

    According to the story, “The retailer's global 911 department fielded calls late Thursday from Mississippi and Louisiana emergency workers looking for empty Wal-Mart facilities that could be used as shelters.

    “Meantime, an employee from Wal-Mart's trucking division worked on plans to get stores up and running after a massive storm. He contacted government agencies in Mississippi, Louisiana and Texas, the states in Gustav's path, for transportation credentials that would allow Wal-Mart trucks and emergency vehicles into the damage zones. Of particular importance are overweight trucking permits that will allow Wal-Mart to haul massive power generators to stores.

    “By Friday morning, as Gustav was lingering off the coast of Jamaica, about 10 people were manning the Wal-Mart emergency center, handling merchandise deliveries and dispatching portable satellite-phone teams, fuel teams and restoration teams to areas they expect will be at the periphery of the storm.”

    The lessons of Hurricane Katrina – when Walmart and other retailers were far better able to cope with the devastation than was the federal government - appear to have been well-learned. As the Journal notes, “In the aftermath, Wal-Mart's approach to emergency response was widely cited and studied by groups, including the U.S. Senate and Harvard University's Kennedy School of Government. One of the biggest lessons: better coordination is needed between private and public sectors.”

    KC's View:
    Whoever wins the election in November, one hopes that when they are trying to figure out how to make the nation’s emergency response mechanisms more effective, they turn to the private sector for advice and direction.

    Published on: September 2, 2008

    Ireland’s Sunday Business Post reports that Superquinn chairman Simon Burke, who engineered the acquisition of the legendary retailer from founder Feargal Quinn by the Select Retail Holdings (SRH) consortium three years ago, is denying rumors that the company is once again up for sale.

    ‘‘I am getting pretty fed up of all the talk,” Burke tells the Post, conceding that the company has been approached a half-dozen times about selling the chain. ‘‘There is obviously speculation that we are considering selling the company and that speculation is very visible and very high profile. But let me be clear about this, this business is not for sale.”

    According to Burke, Superquinn has a long term relationship with Goldman Sach’s corporate finance team in London, and has, as a matter of policy, referred unsolicited bids for the company to its advisers…which has led to the speculation.

    ‘‘There is so much esoteric interest in this company, it is something of a celebrity,” Burke tells the Post. “Every time I sneeze, it seems to make news in a newspaper; Superquinn is a corporate celebrity.”

    The Post reports that “rather than exit the business, Burke said the SRH consortium was focused on expansion. A new store in Portlaoise opened last week, the chain’s second new opening of the year and its 24th store in all. A further outlet in Rathgar, Dublin, is on the cards in the near future, according to Burke…(and) the company plans to open up to ten additional outlets over the coming years.”

    Burke described the churning rumor mill as “a storm in a teacup.”

    KC's View:
    Burke can deny the speculation all he wants…it seems likely that under the right circumstances, Superquinn indeed will be sold. The competitive landscape in Ireland is only going to get tougher, and it will become increasingly difficult for a relatively small and independent entity to maintain and increase market share. (Though I’m not entirely sure that it will be a British retailer such as Tesco that will end up acquiring Superquinn; there are reports that a private equity group could make the most persuasive bid.)

    It pains me to say this, by the way, since I am a longtime admirer of Feargal Quinn and the company he founded; in so many ways, Senator Quinn was ahead of his time when it came to things like customer service, loyalty marketing, food safety, and other important industry issues.

    But the eventual sale of Superquinn probably is more a matter of “when” rather than “if.”

    Published on: September 2, 2008

    The Wall Street Journal reported that the US Centers for Disease Control and Prevention (CDC) is saying that the recent salmonella outbreak, which caused more than 1,400 people to get sick, appears to be over.

    Tomatoes were originally identified as the probable cause of the outbreak, but then the CDC and the US Food and Drug Administration (FDA) said that jalapeno and serrano peppers were the likely carrier.

    KC's View:
    ”Appears” and “likely” are the operative words here. This outbreak is over, but the next one is just around the corner…and pronouncements by the CDC and FDA probably aren’t doing a lot to reassure consumers about the overall safety of the food supply.

    The food industry probably doesn’t feel real confident, either, since the tomato industry lost in the neighborhood of $100 million when it was erroneously blamed for the outbreak.

    Published on: September 2, 2008

    The battle between Roche Bros. and Wegmans in Massachusetts has taken on new ferocity, as the Boston Globe reported that a mind of stalemate seems to be taking place in the state legislature – all over whether Wegmans should get a liquor license for a proposed new store in the town of Westwood.

    One side says that Wegmans should get the license, while the other side says that it should not since a nearby Roche Bros. does not have a liquor license and would be at a competitive disadvantage. But the debate over the license has reached new proportions, with legislators on both sides virtually shutting down the conduct of business in the State House until the matter is resolved n their favor.

    Wegmans has said that it may not open the store if it cannot get the liquor license. Roche Bros. has liquor licenses at three of its stores, but that is the most a single company is allowed under Massachusetts law.

    KC's View:

    Published on: September 2, 2008

    The Washington Post reports that Russia has decided to bar 19 US poultry producers from exporting their products to that country, saying that the companies were not meeting Russian food safety standards.

    While the Russian government says that the decision has nothing to do with increased tensions between Russia and the US over the recent war in Georgia, US experts were not entirely sure that this was the case.

    Russia reportedly accounts for one-third of all US chicken exports.

    KC's View:
    Call me crazy, but when Russia starts questioning US food safety procedures I have to think that something is wrong in the space-time continuum.

    Published on: September 2, 2008

    Dow Jones reports that Tesco “wouldn’t comment” on reports that it is planning to unveil a new value-driven line of grocery products that will be positioned to target customers hit hard by economic tough times.

    Aldi – the German retailer that competes with Tesco in the UK - had primed the speculation pump, saying that while Tesco might be able to compete with it on price, it would not be able to do so on quality.

    Tesco, Dow Jones notes, owns more than 30 percent of the UK grocery market, while Aldi’s market share is about one-tenth the size of the market leader’s.

    KC's View:

    Published on: September 2, 2008

    In the UK, the Telegraph reports that all of Tesco’s new stores there will feature signs on express lanes that say “up to 10 items,” rather than the traditional “10 items or less.”

    The change is being made after an effort by an organization called the Plain English Campaign to get the chain to use proper English in its stores.

    The use of “10 items or less” is considered to be incorrect because “less” means “not as much,” while “fewer” means “not as many.” However, a spokesman for the Plain English Campaign says there remains some debate about this issue because “this can be tricky when referring to quantities. For example, we say less than six weeks, not fewer than six weeks, because we are not referring to six individual weeks, but to a single period of time lasting six weeks."

    And so, rather than become embroiled in a new debate, Tesco decided to avoid the use of “fewer” and “less” altogether and go with the less debatable “up to 10 items.”

    KC's View:
    This has long been a pet peeve of mine, and I’ve always thought that “10 items or less” is improper English. It seems pretty evident to me, even if the Plain English Campaign seems to think there is room for argument.

    However, I think we need to consider this in a broader context. I spend a fair amount of time in stores, and it always amazes me how often I see the English language being mangled in signs, and little effort being made at proper spelling. (Now, I realize that some of you will say that this falls into the “pot calling the kettle black school of criticism,” and I concede that both time and timing sometimes lead to mistakes on MorningNewsBeat. But I take these mistakes seriously, and fix them whenever I am alerted to them. And I take some solace in the notion that the first draft of history usually needs some editing, and that MorningNewsBeat is no different.)

    It would be nice to see retailers try to be more precise on their signs and labels, and to attempt to spell words correctly and write in complete sentences.

    Published on: September 2, 2008

    • The New York Times reports this morning that Target, which still isn’t scheduled to open its first store in Manhattan until 2009, plans to open a quartet of four “pop up” stores in the city that will sell designer merchandise.

    Twenty-two designers will be represented in the stores, and three of them will have merchandise sold in the temporary stores that will not be available anywhere else for at least a month.

    However, while the stores will certainly hinge on Target’s fashion credibility, they also will emphasize the company’s discount appeal, which is getting more emphasis in advertising and promotions during a time of economic decline.

    • The Chicago Sun-Times reports that “after Sears Holdings Corp. reported … a worse-than-expected 62 percent drop in fiscal second-quarter earnings, experts predicted Kmart's extinction and wondered how much longer the retailer will take to hire a CEO.” According to the story, “A Sears spokesman said Thursday there was no update on a search to replace former CEO Aylwin Lewis, who left Feb. 2 after a disappointing holiday season, and there was no time frame for hiring a new leader.”

    KC's View:
    No vision, no leadership, and no apparent possibility that this chain will find any sort of traction. Hardly a surprise, since Sears and Kmart haven't shown any real sparks since the company was acquired by investor and financier Edward S. Lampert.

    Compare that to Target, which few people believe will have any trouble weathering tough times in the long run.

    Published on: September 2, 2008

    • Craig Owens, executive VP/CFO at Delhaize Group, is leaving the retail company to become senior VP/CFO/CAO at Campbell Soup Co. He succeeds the retiring Robert A. Schiffner.
    KC's View:

    Published on: September 2, 2008

    Here are some of the stories that broke while MNB was on a brief hiatus…

    • The Financial Times reported that Walmart’s new Marketside small store format will feature “a natural wood finish around the entrance, and deep-purple awnings - the same colour that will be used on the aprons of the staff, and on its website … The Marketside name appears in lower case green lettering, with no reference to its parent company.”

    According to the story, the first four Marketside units will open in the Phoenix market. Walmart has said that the test will involve up to 10 stores, and that at least two more sites in the Phoenix area have been acquired.

    • Minnesota grocery retailer Coborn’s, which operates 34 stores in the upper Midwest, announced it has acquired and will reopen SimonDelivers as CobornsDelivers beginning in October, with customers who used the e-grocery company in its previous incarnation able to easily reactivate their accounts and access their past order histories.

    • The Los Angeles Times reported that Safeway-owned Vons has joined Kroger-owned Ralphs in changing its double-coupon policy. Both companies have now changed their policies so that shoppers cannot double coupons worth more than 50 cents. The move is seen as a way of protecting margins at a time when costs are increasing.

    • The Boston Globe reported that the Massachusetts Public Health Commissioner is considering the imposition of a statewide ban on the use of trans fats in all restaurant foods. California last month became the first state to outlaw trans fats; in Massachusetts, the cities of Boston, Cambridge and Brookline already have banned the artery-clogging fats.

    • The Los Angeles Times reported that “two small ethnic grocery-store chains are combining in a bid to grab a greater share of the Latino market in Southern California.” The Gigante chain of seven stores has merged with its competitor, the El Super chain. There now will be 15 El Super markets in Southern California. According to the story, “The name change follows the May purchase of all seven Gigante stores by City of Commerce-based Bodega Latina Corp., which operates El Super.”

    • In view of all the tumult taking place at Starbucks, the company has decided that CEO Howard Schultz and other top managers – from the vice presidential level and above - will not be getting any pay increases during the next fiscal year.

    Reuters reports that CVS Caremark plans to begin testing a high end beauty concept called “Beauty 360,” which is seen as a way of competing with chains such as Sephora. Test stores are expected to open next to existing CVS units on the east coast and west coast of the US.

    • The Washington Post reported that on September 16, the US Food and Drug Administration (FDA) will hold a public haring designed as a first step toward developing a long-term strategy that will create clearer and more useful allergy labels on the nation’s food products.

    USA Today reported that Starbucks is rolling out a new breakfast menu featuring six new “better for you” items that include “hot oatmeal, an energy bar and a whole-grain apple bran muffin with fruit pieces.

    “Starbucks plans to revamp its lunch and dinner menus, too, in 2009. The goal is to lure back core customers who are visiting its stores less often and spending less when they do.”

    • Golub Corporation/Price Chopper Supermarkets announced that Frank Manion, the company’s Regional Perishable Merchandiser, has been promoted to the position of Zone Director.

    In addition, the company announced that Scott Sabatino, Price Chopper’s Regional Non-Perishable Merchandiser, has been promoted to the position of Zone Director.

    And, Price Chopper announced that Larry Ritzert, Senior Category Manager - Meat Merchandising, has been promoted to the position of Director of Meat Merchandising.

    • Family Dollar Stores said that Lonnie W. McCaffety, the company’s Regional Vice President for the New Orleans area, has been named Vice President – Store Operations.

    • And finally, just as MNB went on vacation, Walmart reached a settlement with its former vice chairman, Thomas Coughlin, who has been convicted of wire fraud and tax evasion. Because Coughlin’s illegal activities took place during his employment at Walmart, the company sought to void his multi-million dollar retirement package, an effort that Coughlin sought to derail.

    Terms of the settlement were not disclosed.

    KC's View:

    Published on: September 2, 2008

    Got the following email from MNB user Terry Halverson regarding the 20 cent-per bag fee being charged in Seattle for disposable bags handed out at supermarkets…which MNB didn’t think seemed like such a bad idea but that local grocers take exception to:

    Grocers are and have been doing their part to make our earth a better place, especially in Seattle. We tried to get the City's attention (the mayor shops in our stores almost daily) to show that we would do even more, and to explain a number of important things that they missed in their ordinance language. The bottom line is that they made it impossible to get in front of them and share our views. I was more than surprised, and very disappointed in their attitude and how they handled this. In fact, I've lost what respect I had for how they put laws into place. Sounds bleak I know, but you would at least think that they would have asked us how the ordinance language will affect service and costs, and if we had any ideas to improve it before going to a vote.

    Ironically, after the ordinance was completed, the city council president told me that he was going to Ireland to check out how the plastic bag fee was working there, and wanted to know if we wanted to have him find out how it affects service, costs, and so on. Oh well, I guess he just got himself a first time trip to Europe.....paid for by our new bag tax!

    Worst thing is, anybody owning a store close to city limits is going to lose business. One of the top comments on the blogs is that people that work or live just outside the city will do more of their shopping there. I feel sorry for those guys. The city's response to this comment was "we don't think it will make any difference, besides, other cities will eventually pass the same law". So far, two cities have taken up the suggestions that we proposed as alternatives to this fee.

    The point you make is a good one, and it seems that perhaps I underestimated the commitment that Seattle’s grocers had to a voluntary recycling program and educational effort that could have accomplished the same results without legislation and a tax.

    On the subject of the viability of meal assembly stores, one MNB user wrote:

    I’m a consumer of meal assembly services. I can’t say what their best target demographic is, or whether they’re on their way up or out. However, I am a 35 year old sales exec (not quite elderly yet!), wife and mother and have used these services consistently for the past 2 years. To me, the meal assembly services are a good value proposition short of having a personal chef plan and prepare meals. My husband, I, or sometimes both of us, can assemble the meals once a month. Once we get home from a long day of work, it only takes 30 minutes to prepare dinner. In addition to saving time, there seems to be more variety and less waste than if we planned the meals ourselves – a big plus for my husband who considers it practically immoral to waste food. Perhaps that’s because otherwise our “planning” consists of walking up and down grocery aisles and trying to come up with what to eat for the next week. While I love eating, I truly despise the processes of planning, procuring, transporting, sorting, storing, preparing, and cleaning up needed to feed our family of 3. Meal assembly helps simplify all of that. This process dramatically changes our approach to, and time spent in the grocery store. After taking care of a month’s worth of main courses at a meal assembly service, we’re only looking for produce, breakfast, drinks and desserts once we hit the store. (Which for us, happens to be a combination of Whole Foods and Trader Joe’s).

    There recently was some coverage and debate about bisphenol A (BPA), a chemical commonly found in household products such as baby bottles and food containers. Some studies have linked the chemical to prostate and breast cancers, diabetes, behavioral disorders such as hyperactivity and reproductive problems in laboratory animals – and both Walmart and the entire nation of Canada have decided not to sell children’s products containing BPA. However, the FDA has said that BPA does not pose a health hazard when people are exposed to it in small amounts.

    MNB user Adam Dill wrote:

    As science was never my strong subject, I have yet to find a clear answer if BPA is harmful for you or not. I do know this, someone is a brilliant marketer. With our second baby on the way, I have been instructed by my wife to throw out the tote of baby bottles from our first child (a mere 2 years ago) and that we would be buying all new BPA free bottles. At $20 for just 2 plastic bottles, I am about to cancel my first child's 529 college savings fund just so her little sister can have BPA free bottles.

    It just shows how fear and peer pressure can out weight facts when dealing with your children. As I have read studies on both sides of the issue, I guess I would rather be safe than sorry…

    MNB user Liz McMann chimed in:

    “BPA has been safely used in food contact applications for 50 years and plays an essential role in keeping foods safe and fresh.”

    Arguments like this just don’t hold much weight. Our methods of food preservation have come a long way since we buried meat in the ground and carried milk around in bladders and stomachs. I’m sure our ancestors argued that these methods were perfectly safe…because it was all they knew. So while we’ve done a great job at preserving foods in cans and jars, dehydrating and freezing them, we are finding that some methods are safer than others. We’ve advanced to the point that we can worry a little less about acute problems like botulism and a little more about long-term affects of chemical liners in our cans. Just because we’ve been using BPA for 50 years doesn’t mean it’s safe! How’s the cancer rate been for the last 50 years???

    KC's View: