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    Published on: July 24, 2009

    The Wall Street Journal reports that Valassis communications has won $300 million in a lawsuit that charged News America’s News Corp. unit with unfair competitive practices and using “its dominant market position in its in-store marketing business to undercut Valassis in its freestanding insert, or newspaper coupon, business.”

    This is just the first of three lawsuits filed by Valassis against News Corp.. The other two are a federal antitrust suit and an unfair competition lawsuit in California.

    News America has denied the charges and said it will appeal the decision.

    Chris Mixson, president of News America Marketing, issued the following statement:

    “We are disappointed with today`s decision, which rewards a company that turned to litigation as its business strategy rather than compete. Although we are sure that the Michigan state court jury did their best to reach a fair conclusion, we recognize that they were hampered by the court`s decision not to allow a key piece of information to be introduced: the legal analysis by the Federal Trade Commission that Valassis had made ‘an effort to induce collusion’ when it announced its new pricing policy in a public investor call. This information would have shown that this lawsuit was merely part of a larger strategy to get News America Marketing to raise its prices, a move that would have affected both our clients and their consumers by reducing the number of coupons available - a consequence that would be extremely unfortunate in this economy.”

    The Journal notes that another in-store marketing company, Insignia Systems, “which has some business relationships with Valassis, also has filed suit against News America for unfair competition in federal district court in Minneapolis.”
    KC's View:
    To put this as charitably as I can, almost everyone I have ever talked to in this segment of the business says that News America is a tough and ruthless competitor that will do anything and everything to build market share and put its rivals out of business.

    It does not come as a surprise to me that News America lost this suit, nor does it shock me that it is likely to remain in the court system for years as appeals are filed.

    One can only hope that justice will be served in the long run.

    Published on: July 24, 2009

    Supervalu-owned Shaws Supermarkets said yesterday that its president, Larry Wahlstrom, is retiring, to be succeeded by Mike Witynski, who has been serving as group vice president of Our Own Brands, a Supervalu unit.

    The change comes as the Wall Street Journal reports that investors are hungry for change at Supervalu, where new CEO Craig Herkert – formerly of Walmart – is settling into his new role. There is speculation that a retail-oriented Herkert could spin off or sell the company’s wholesale business, as well as that he could sell one or more of Supervalu’s retail banners as a way of retiring some of the company’s debt.
    KC's View:
    It wasn’t that long ago that Shaws lost another senior executive when Bill Nasshan left the company to become senior vice president of merchandising and marketing at Bi-Lo.

    Just based on the email I’m getting, there is a lot of skittishness at Shaws about the future of the chain…and rampant speculation about some fairly radical moves that could happen at Supervalu.

    Published on: July 24, 2009

    Kroger-owned Fred Meyer said this week that it has installed a pair of Shorepower Electric Vehicle charging stations at its Portland, Oregon, store that is serving as a “green” flagship for the chain.

    The stations can charge eight vehicles at the same time, and will do so at no cost to store customers.
    KC's View:
    It was an MNB user that referred me to this story…commenting, quite rightly, that while there may not be a lot of electric cars on the road right now, this is a symbol of where things are going and how radical change potential could be.

    Just in the last few weeks, there have been stories about how companies such as McDonald’s and Tesco have been installing such charging stations. It seems inevitable that we are going to see a lot more … just as we are going to see more and more “green” innovations like those covered in our next story…

    Published on: July 24, 2009

    MNB reported last week that Delhaize-owned Hannaford Supermarkets was opening a new store in Augusta, Maine, that it believed would qualify for LEED (Leadership in Energy and Environmental Design) Platinum certification, the highest standard for U.S. Green Building Council’s LEED program.

    Well, the store opens tomorrow…and indeed, the unit has received Platinum LEED certification. Among the store’s features:

    • Ninety-nine percent of the former Cony High School building, which used to stand on the lot, was recycled or reused. More than 96 percent of construction and demolition debris was recycled.

    • The new store is expected to utilize about half as much energy as a typical supermarket.

    • The store has many unique visual features that save energy and/or are environmentally preferred. For instance, natural daylight is utilized in six different ways to light the store; a 7,000 square foot green roof, which is a layered system of soil and drought resistant plants, will reduce water runoff and help insulate the store; and 86 percent of the wood incorporated in the store is Forest Stewardship Council (FSC) certified.

    “We’re thrilled to receive this certification and serve as a role model for other businesses in the retail community. We’ve been working to improve the environmental performance of our stores for many years,” said Ronald Hodge, chief executive officer and president of Hannaford. “Construction of this store will allow us to identify additional measures that we can use to reduce our environmental footprint, while maintaining competitive prices and creating a more pleasant atmosphere for our associates and customers.”
    KC's View:

    Published on: July 24, 2009

    The Wall Street Journal reports that PepsiCo “is fumbling” its repositioning and rebranding of the Gatorade brand, now labeled as “G” is commercials and on store shelves. While the goal was to make the brand cool, it appears to have simply confused shoppers, and sales have declined.

    The bigger problem, according to the story, is that this is the second major branding effort that has not gone well for PepsiCo – the first was new packaging for Tropicana orange juice that replaced the familiar orange-with-a-straw image with near-generic graphics that also confused shoppers. In the case of Tropicana, PepsiCo almost immediately went back to the old cartons…but it won’t be as easy with Gatorade.

    To be fair, the Journal notes that overall sales of sports drinks have declined 12 percent this year, and there is more competition crowding the marketplace.
    KC's View:

    Published on: July 24, 2009

    Reuters reports that while Walmart does not plan to open any new small-format Marketside stores for the time being – there are four being tested in the Phoenix market – it does plan to test Marketside private label products in some of its discount stores and superstores. The items are largely in the prepared meal and chilled categories.
    KC's View:
    This is interesting. I think we’ll see expansion of the Marketside brand that will go beyond the number of stores in that format opened by Walmart. It may be in private brands, it may be in how fresh food departments in supercenters are labeled and categorized.

    Published on: July 24, 2009

    A recurring theme here at MNB is how the food industry is going to appeal to the next generation of shoppers. And so, it was with some pleasure that we received the following press release:

    “The Save Mart stores of Northern California and Northern Nevada and Lucky Supermarkets of Northern California have launched their searches for the region’s top cooks aged nine through 13. The Save Mart Kid’s Cook Off final will be held on Saturday, September 26 and the Lucky Kid’s Cook Off final will be held on Sunday, September 27, both at Six Flags Discovery Kingdom in Vallejo, Calif.

    “’Celebrating a young person’s talent in the kitchen encourages them to learn about and practice good nutrition,’ said Sharon Blakely, Nutrition Supervisor for Save Mart Supermarkets. ‘The food habits our children develop now will remain with them the rest of their lives. We hope the nutritious cooking we will see in this competition will grow to be healthy eating for life.’

    “The grand prize winners of the Save Mart and Lucky Kid’s Cook Off competitions will receive a trip for four to Heavenly Ski Resort. The winners also will be invited to make a guest appearance on Hey Kids Let's Cook!, an award-winning children's television cooking show that airs in several key markets, including the California Central Valley, the San Francisco Bay Area, and the Reno-Sparks area.

    “The first prize winners of each category will receive a Six Flags Discovery Kingdom experience for four. Flight winners will receive iPod Nanos and speaker sets. Every participant at the Kid’s Cook Off final event will receive four tickets to the Tutankhamun exhibition at the de Young Museum in San Francisco.”
    KC's View:
    I love this on all sorts of levels. It has theater. It is relevant to a supermarket’s central mission. It is enlightened in its approach to nutrition. And it largely has prizes that kids might actually want…as opposed to prizes that adults think kids should have.

    It is just a cool contest.

    Published on: July 24, 2009

    In the Kindle community blog, CEO Jeff Bezos has apologized for the company’s decision to remotely remove e-copies of George Orwell’s “1984” and “Animal Farm” from the Kindles of people who bought it; it ended up that the company that created the e-version did not have the rights to the books.

    Bezos wrote: "Our 'solution' to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we've received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission."
    KC's View:
    Certainly not a fatal misstep, but a misstep nevertheless, resulting from tone deafness. I hope they’ve learned their lesson.

    Published on: July 24, 2009

    • In yesterday’s MNB, the Sacramento Bee was quoted as reporting:

    “Safeway Inc. has launched a broad discounting campaign in Northern California, another sign that the bad economy is driving mainstream grocers to emphasize price in addition to their usual focus on quality, service and style … The Safeway campaign, launched last week, promises long-term price reductions – as opposed to weekly specials – on thousands of items throughout the store. The company wouldn't disclose the exact number of items the promotion covers, or the depth of the average discount.”

    However, I neglected to continue the quote from the story, which noted that the company “will continue to offer promotional and club-card discounts, on top of the new broad price reductions.”

    In other words, it will be both short-term and long-term discounts for Safeway.
    KC's View:

    Published on: July 24, 2009

    • The Press of Atlantic City reports that the state of New Jersey is launching a new program designed to encourage food retailers to build or rehabilitate supermarkets in poor neighborhoods and communities not currently served by traditional grocery stores, combining low interest loans with private investment.

    • Following up on recent reports that 7-Eleven plans to use the real estate softness created by the recession to dramatically increase its US store presence, the Los Angeles Times this morning reports that the c-store retailer plans to open as many as 600 new stores in Southern California, which would be a dramatic increase over the 800 stores that 7-Eleven currently operates there.

    • In Canada, the Victoria Times Colonist reports that 22-store Thrifty Foods there will stop handing out disposable plastic bags – a move that it says will take as many as 27 million such bags out of circulation in a given year.

    The chain will still make disposable paper bags available, as well as sell canvas reusable bags for 99 cents apiece.
    KC's View:

    Published on: July 24, 2009

    • Safeway Inc. said yesterday that its second quarter profit was up 1.8 percent to $238.6 million, on Q2 sales that were down 6.5 percent to $9.46 billion. Same-store sales for the period were down 1.5 percent excluding fuel sales.

    • The Great Atlantic & Pacific Tea Co. (A&P) announced that it had a second quarter loss of $65.2 million, compared to a profit of $1.3 million during the same period a year ago. Q2 sales decreased 4.5 percent to $2.79 billion, on same-store sales that dropped 3.3 percent.

    At the same time, Ron Burkle’s Yucaipa Cos. announced that it is investing $115 million in A&P, adding to an existing investment and getting two new members on the board of directors.

    • reported yesterday that its second quarter earnings were $142 million, down 10 percent from the $158 million reported during the same period a year ago – a decline that the company ascribed to a legal settlement it reached with Toys R Us over online exclusivity agreements. Q2 sales were up almost 15 percent to $4.65 billion.
    KC's View:

    Published on: July 24, 2009

    • Schnuck Markets CEO/chairman Scott Schnuck said yesterday that Todd Schnuck has been named the company’s COO after 22 years as CFO.

    It is reported that Bill Bredenkoetter, senior vice president of store operations, and Randy Wedel, senior vice president of marketing and merchandising, are retiring to make room for the organizational changes but will continue in senior consulting roles.

    Among the other changes at Schnuck Markets:

    Dave Bell, the company treasurer, has been named the company’s new CFO.

    Rick Frede, formerly senior vice president of logistics, will become chief talent and strategy officer.
    KC's View:

    Published on: July 24, 2009

    ….will return.
    KC's View:

    Published on: July 24, 2009

    For the last couple of years, it seems like I’ve spent a lot of time writing about the burgeoning in-store health clinic business and the influence it may have on the delivery of basic medical services, not to mention the ability of retailers to forge deeper relationships with shoppers.

    This week, I thought I’d come down with a mild case of conjunctivitis, passed along to me presumable when I was high-fiving the little kids next door who, I later found out, were infected with the dreaded pink-eye. So it seemed like a good opportunity to try out an in-store health clinic, especially since it probably would take a couple of days to get a regular doctor’s appointment.

    I went online and discovered there were two CVS Minute Clinics within six miles of my house in either direction…I flipped a coin and went off to visit the facility in Riverside, Connecticut.

    There, in the back of the store, I found a small Minute Clinic where I used a small kiosk to sign in and provide some basic personal information. There was no line, and I was immediately ushered into the office by a delightful nurse practitioner, Adele Stanley, who proceeded to take my medical history, my blood pressure and temperature, and run a couple of quick tests that confirmed my self-diagnosis. At my request, she emailed a prescription for eye drops to the CVS store in the same building where MNB World Headquarters is located, and she cautioned me that if my condition did not improve in 24 hours, I should call my doctor.

    The total cost was $67, and my co-pay was $25. While my portion would have been the same had I visited an actual doctor, the total cost almost certainly would have been a lot more expensive. And the best news – my eyes feel better.

    Now, I do have some mild criticisms. I was surprised to find out that if I make a return visit to the dame Minute Clinic, I pretty much have to go through the same sign-in process at the kiosk. And, when I was asked about the medications that I take, I really was surprised to find out that the nurse could not simply access the information from her computer…even though all of my prescriptions are from CVS. (If my usual pharmacy was another retailer, they could offer me a discount on the prescription if I got it from CVS.)

    I asked about when flu shots will be made available, and while the nurse said that it would be sometime in late September and early October, she did not know whether CVS would be emailing notifications to customers. That’s something that they certainly ought to do, especially since they now have my email address and I’ve demonstrated a willingness to patronize the Minute Clinic concept.

    In all, the CVS Minute Clinic experience was a good one. I’d go back without hesitation. And it reinforces my belief that – especially if some of the processes are tweaked – the offering of such services by retailers makes a lot of sense.

    Fascinating piece in the Chicago Tribune the other day about how the town of Tiburon, California, wants to photograph every car that enters and departs the city, and use that information to solve crimes there – a plan made possible by geography that offers a limited number of ways to get into the community.

    Local officials say that they won’t be invading anyone’s privacy or making the records public; the photos will simply be there as a resource when a crime (and there aren’t a lot of them in Tiburon) is committed; the photos will be erased after a maximum of 60 days. But privacy advocates are concerned that this is an Orwellian move with frightening implications.

    I sort of get both sides of this argument. There is something a little scary about this level of constant surveillance and tracking, though to be fair, it already is happening – if you use a credit card or EZPass or a mobile phone, it is pretty easy to figure out where you are any given moment.

    There’s a corner in my town where there is a “right turn only” lane that drivers – who sometimes get off the crowded turnpike to cut through town – routinely ignore, causing traffic jams and even coming dangerously close to hitting pedestrians. And while I have concerns about Big Brother, I wish they’d put a camera there and start ticketing the mostly out of town drivers who seem not to care about basic traffic laws.

    Mark Buehrle of the Chicago White Sox gets a big “Wow!” for his perfect game yesterday against the Tampa Bay Rays, just the 18th in Major League baseball history.

    But DeWayne Wise, who was inserted as a replacement center fielder in the ninth inning for his defensive skills, also gets a big “Wow!” for the amazing catch he made that preserved the perfect game.

    Just great stuff. And yet another example of why, as Robert B. Parker says, baseball is the most important thing in life that doesn’t matter.

    BTW…just for the record, I was born in New York City’s Greenwich Village on November 4, 1954…and I have the birth certificate to prove it. Just in case anybody wants to ask questions about whether I’m a real American blogger.

    Finally caught up with “Gran Torino,” and I think I’m in the minority – I didn’t think it was as good a movie as most people seemed to feel. I’m a Clint Eastwood fan and have liked a lot of his recent work, especially as a director…but I thought he miscast himself as the lead in this story about a bigoted and retired Detroit auto worker who finds himself in the middle of a racist imbroglio in his neighborhood – and, remarkably, finds himself siding with the immigrant family next door.

    It was an interesting story, especially put into sharp relief by the events in Cambridge, Massachusetts, this week, that remind us that race issues in this country have not been resolved by the election of an African-American to the presidency.

    But my big problem was that Eastwood simply isn’t a good enough actor to pull off the role. I couldn’t help but think that had he cast Gene Hackman in the role, it would have worked a lot better and been a lot more powerful.

    I have two excellent Italian white wines for you this week: the 2007 Livernano L'Anima Bianco, made from a blend of Chardonnay, Sauvignon Blanc and Gewurztraminer, and the 2007 Kurtatsch Cortaccia Moscato Giallo. Both are excellent when served crisply cold, especially with seafood or fruit. Yummm….

    Last year, when the MNB community chimed in with a list of the great burger joints around the country, I was surprised to see how many people recommended a place called the Burger Bar & Bistro in Norwalk, Connecticut – just a half dozen miles from my house, and a place I didn’t even know existed.

    Well, for those of you who recommended it, it is time for a return visit – they’ve tripled the size of the place, have installed a very nice bar, and expanded the menu a bit – though the core still is a selection of some of the best burgers I’ve ever had.

    That’s it for this week. Have a great weekend, and I’ll see you Monday.

    KC's View: