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    Published on: September 24, 2008

    The Chicago Sun-Times reports this morning that Chicago Mayor Richard Daley has said that the city needs to get out of the way of supermarket companies interested in opening stores in underserved communities.

    "A grocery store is important to the health of the people in these communities," Daley said. "Is there something that we are putting in as a barrier? We have to figure that out … The residents in many communities are paying high costs for food, and the quality is not there.”

    Not long ago, Chicago’s City Council rejected Walmart’s attempt to open a supercenter in one of those neighborhoods, raising questions about whether the city’s political priorities were at odds with the needs of at least some of its citizens. The city reportedly has as many as 40 properties in underserved areas that could be developed into grocery stores.

    KC's View:
    If this isn’t just rhetoric, this will be good news for food stores as well as shoppers. If it isn’t rhetoric.

    Published on: September 24, 2008

    A report by researchers from John Hopkins University’s School of Medicine recommends that energy drinks be required to have more prominent labels that feature information about caffeine doses and warning of health risks when consumed with alcohol.

    The study appears in the medical journal, Drug and Alcohol Dependence, and also recommends that doctors need to become more familiar with the signs of caffeine intoxication.

    The recommendations are made public during a week in which MillerCoors has backtracked from a previous position and has decided to delay the launch of its new Sparks Red caffeine-infused alcoholic energy drink. Attorneys General from 25 states had asked the company to abandon plans for the product rollout, saying that it is a “recipe for disaster" because “adding caffeine to alcoholic beverages reduces drinkers' sense of intoxication.”

    The American Beverage Association (ABA) issued the following statement in response to the John Hopkins study: “It's unfortunate that the authors of this article would attempt to lump all energy drinks together in a rhetorical attack when the facts of their review clearly distinguishes the mainstream responsible players from novelty companies seeking attention and increased sales based solely on extreme names and caffeine content … those suggesting that energy drinks should require warning labels need to be aware of the slippery slope this would create: to be consistent, products at coffeehouses also would require such unnecessary labeling.

    “Furthermore, our companies market their energy drink products responsibly. It's unhelpful to the public that the authors would combine certain extreme products with illicit or suggestive names with other more mainstream energy drinks in an effort to sensationalize and demonize the entire product category and gain exposure for their work.”

    KC's View:
    I’ve been saying for a long time that there eventually would be studies questioning the health effects of energy drinks. And while I would agree that there are responsible marketers and irresponsible marketers (remember the morons who brought out an energy drink called “Cocaine”?), legislation that would require better and more comprehensive labeling probably can’t distinguish between them. So maybe the legitimate marketers will have to bite the bullet and put up with more regulation in the best interests of the shoppers.

    Published on: September 24, 2008

    Forbes reports that Starbucks will introduce three new hot breakfast sandwiches next week. The three sandwiches are being marketed under the name Piadini, will feature artisan bread and will be filled with either sausage, egg and cheese or portobello mushroom, spinach and ricotta cheese. The rollout follows the introduction earlier this month of oatmeal, apple bran muffins and multigrain rolls to its breakfast menu. (Starbucks reportedly has said that oatmeal is the most successful food product launch it ever has had.)

    New lunch items are slated to be rolled out by Starbucks in the next six to eight months.

    Meanwhile, the Puget Sound Business Journal reports that Starbucks will open its first store in Portugal next week, operated by a joint venture of the company’s Starbucks Coffee International subsidiary and Grupo VIPS, a subsidiary of Sigla S.A.

    Grupo VIPS operates 75 Starbucks stores in Spain and 45 in France.

    KC's View:

    Published on: September 24, 2008

    • The Boston Globe reports this morning that the Massachusetts Supreme Judicial Court has reinstated a class-action lawsuit against Walmart, “ruling that a lower court judge was wrong to throw out the case filed by 67,500 workers who claim they were denied meal breaks and forced to work off the clock. The lawsuit was decertified in 2006 when a Middlesex Superior Court judge ruled the employees had no right to seek compensation for meal breaks, which are unpaid. The judge also ruled the plaintiffs could not use testimony by Martin Shapiro, a statistics expert who interpreted Wal Mart's time-keeping records and other reports for the employees.”

    According to the story, “The lawsuit resembles cases filed against Wal-Mart across the country. The class-action suit began in 2001 when two former Wal-Mart employees filed a complaint on behalf of former and current employees at 47 Wal-Mart stores around Massachusetts. They alleged they were denied breaks and inadequately compensated for all of the hours they worked. In 2004, a Superior Court judge certified the case as a class-action lawsuit.”

    • Published reports say that Walmart plans to open its first cash-and-carry store in India next year. The company’s Indian operation are a joint venture with Bharti Enterprises, an arrangement mandated by Indian law, which does not allow companies from outside the country to wholly own retail businesses.

    • Published reports say that Walmart is considering opening stores in Sweden, the first time it will have moved into this part of Northern Europe.

    Walmart executives are not confirming or denying the report.

    KC's View:

    Published on: September 24, 2008

    Forbes has a story reporting that a Scotland school district is negotiating with the Subway fast food sandwich chain to set up franchises in as many as six schools…and if the test works, it could be expanded to schools throughout the land of Brigadoon. In one case, the school district is considering buying a franchise itself and keeping the profits – less, of course, the percentage that has to be paid to Subway.

    There is, to be sure, some controversy about the initiative. While Subway may have a better reputation for nutritious food than some of its competitors, some parents reportedly are concerned about feeding their kids fast food at school. Forbes writes, “Though it may be too early to worry about huge food courts at schools, featuring McDonald's or Burger King outlets, Subway may already be a step too far for parents concerned about their kids' exposure to fast food. But the Scottish government is eager to promote this deal as a good move for the health of school children.”

    KC's View:
    At some level, you have to wonder if this is yet another example of a fast food chain getting the upper hand in establishing a relationship with young shoppers.

    Wonder if Jared likes haggis?

    Published on: September 24, 2008

    The National Retail Federation (NRF) released a forecast this week saying that the current economic “turbulence and anxiety,” combined with high gas and food prices, is likely to result in weak end-of-year holiday sales that will increase just 2.2 percent over last year, to $470.4 billion. This figure would be half the ten-year average sales gains for the November-December period.

    According to the Washington Post story about the forecasts, “Merchants have also scaled back holiday inventories and seasonal sales staff from a year ago. The challenges are compounded by a holiday season that has five fewer days between Thanksgiving and Christmas Day than in 2007, which could make consumers delay their buying.”

    KC's View:
    The “turbulence and anxiety” that NRF thought it was detecting just a few weeks ago is going to look like nothing compared to the way people probably are feeling right now.

    It wasn't that long ago that people were arguing about whether we were in store for a recession…and this week, every once in a while, you actually hear the word “depression” being bandied about.

    If Christmas sales only go down 2.2 percent, it may look like a gift from heaven.

    Published on: September 24, 2008

    Crain’s Chicago Business reports that Andrew Wood, an analyst with Bernstein Research, is suggesting that Kraft Foods could be in the market to acquire Cadbury PLC, which would then “give Kraft a leading position in global confectionery, and with its leading position in biscuits/cookies would create a global leader in ‘sweet snacks’.” Kraft and Cadbury executives did not comment for the article.

    Crain’s Chicago Business reports that Procter & Gamble is suing Kraft Foods “again” for patent infringement.

    According to the story, P& G is claiming that “Maxwell House Coffee has copied a Folgers package. The patent lawsuit, filed by P&G in U.S. district court in Cincinnati, follows similar infringement complaints that the makers of the rival U.S. household coffee brands filed against each other last year. P&G spokeswoman Jen Becker said earlier litigation is still pending.

    “P&G says Maxwell House's new four-pound plastic container infringes upon Folgers' lightweight plastic container introduced five years ago. The lawsuit seeks to stop Kraft Foods from selling the new Maxwell House container and also asks for damages to be awarded.”

    • Superior Grocers of Santa Fe Springs, California, and Price Chopper Supermarkets of Schenectady, NY, have been given the 2008 Maximizing People Potential Award (MAXX Award) by the Food Marketing Institute (FMI). The awards recognize “superior training and human resource programs,” and were made at the FMI Human Resources/Training and Development Conference.

    KC's View:

    Published on: September 24, 2008

    …will return.
    KC's View:

    Published on: September 24, 2008

    Walmart reportedly has scheduled the opening of its first four Marketside stores in the Phoenix, Arizona, area for October 4.

    The 15,000 square foot stores, which Walmart has said will offer convenient fresh foods and prepared meals for time-constrained consumers, are positioned – both geographically and thematically – to compete directly with Tesco’s Fresh & Easy Neighborhood Markets, which has 78 units currently operating in Arizona, Nevada and Southern California.

    The Marketside format does not carry the Walmart name, a first for the world’s largest retailer.

    KC's View:
    The stores may be fresh food oriented, but they almost certainly will feature sharp pricing that will appeal to customers who may be more money-poor than time-constrained.

    And it isn’t hard to guess that these stores, while they may be a radical departure for Walmart, also will seem more familiar and comfortable to US shoppers, unlike the units being opened by British retailer Tesco.