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    Published on: October 26, 2009

    The New York Times reports that the Smart Choices nutritional labeling program is losing support amid criticisms and investigations of the criteria used to identify products as being healthier than others. Much of the criticism stems from the use of the Smart Choices label on Kellogg’s Froot Loops sugared cereal, with some people saying that consumers are being misled about what actually makes up a nutritious and healthy diet.

    Kellogg’s said last week it would phase out the use of the Smart Choices logo as inventories run out. PepsiCo said it is cutting its association with the Smart Choices program. And officials with Smart Choices said they are suspending their operations while waiting for the US Food and Drug Administration (FDA) to develop regulations on what can be said on package fronts.

    Connecticut Attorney General Richard Blumenthal, who launched an investigation into whether the Smart Choices program was in violation of the state’s consumer protection laws, said he saw the shifts as a “partial victory.”

    The Times writes that “the actions were a remarkable turnabout for an initiative that was developed by many of the country’s largest food manufacturers. It had taken at least two years to develop. The Smart Choices logo began appearing on food packages this summer but immediately met with criticism from some nutritionists who felt its criteria were too lax. They pointed to sugary cereals, like Froot Loops, and fat-heavy products like mayonnaise, which they said should not be considered among the healthiest choices in the supermarket. The first ingredient in Froot Loops is sugar.”
    KC's View:
    The problem was that Smart Choices was seen as a marketing program, not a nutritional program...and it actually was hurting companies’ credibility. It was a dumb move - and I’m glad to see that people have come to their senses.

    Published on: October 26, 2009

    Walmart said last week that it will postpone its test in several California stores of a policy that would have eliminated free plastic bags in those locations. Originally, the initiative was slated to kick in sometime in the next couple of weeks, but the retailer now has decided to postpone it until after the end-of-the-year holiday season in order to get a less skewed result.

    "The goal of this test is to gauge customer reaction. We think we'll get a more accurate reaction by offering these bags after the holidays," Walmart spokeswoman Amelia Neufeld tells the Chicago Tribune.

    The Tribune writes, “Signs in Wal-Mart stores in the California cities of Folsom and Citrus Heights had announced that shoppers would soon have to either bring their own bags or buy reusable ones - for 15 cents. The two stores, along with a third in Ukiah, Calif., make up a small test program. Going plastic-bag-free is one of a variety of strategies being tried at stores around the world as Wal-Mart evaluates ways to meet its goal of cutting plastic bag waste 33 percent by 2013.”
    KC's View:
    I know I keep getting killed for this in some quarters, and I know there are studies out there suggesting that in markets where plastic bags have been banned there has been no reduction in plastic bag litter. I just don’t get it. in our household, we use cloth bags exclusively when we go to any supermarket or drug store...and we use far fewer plastic bags.

    Maybe that makes us unique. But I’m going to keep enforcing this policy at home, because it simply seems like the right thing to do. And I don’t need bans or fines to get me to do the right thing.

    Published on: October 26, 2009

    Interesting piece in Connecticut’s Stamford Advocate about how “lower land prices and years of retail stagnation have opened the door into Connecticut for a rush by new grocers intent on expanding their reach.”

    The big name mentioned has just four letters - Aldi - which according to the story “opened 100 new stores last year, will open 80 new ones this year and plans for another 80 next year,” though none of them in Fairfield County, upon which the Advocate focused. However, the story also notes that the Great Atlantic & Pacific Tea Co. is replacing one of its traditional A&P stores in Bridgeport with its Food Basics discount format.

    At the same time, on the upper end of the scale, Fairfield County is seeing the incursion of new stores from Whole Foods and Fresh Market, the latter of which recently opened a store in Westport, which shows “that southwestern Connecticut's high-income crowd continues to draw interest from some retailers, although other chains ratchet up the competition for price-driven shoppers.”
    KC's View:
    For years, I’ve bemoaned the fact that despite the fact that I write about the food retailing business, most of the supermarkets near my house are fairly mediocre at best; the local Stop & Shop is one of the smallest and least impressive in the fleet, and the Shaw’s is big but vanilla. There’s a good ShopRite store and another independent, Palmer’s...but I’ve always found myself driving by almost all of them to go to places like Stew Leonard’s, Costco, and Trader Joe’s - so-called “alternative formats” that simply are more compelling shopping experiences.

    I visited the new Fresh Market the other day, and was impressed...though it seems to me that there could be limits on its appeal. The prices are actually pretty good, though the high-end design works against them...and my concerns would be that its limited selection could equal a limited customer appeal. (Though, to be fair, that certainly hasn’t happened at Stew Leonard’s, which has far fewer items.) The good news is that the Fresh Market has things that Stew’s does not have - like heirloom tomatoes - that could prove to have some appeal to local shoppers.

    Two other things not noted by the Advocate story. One is that there is a Fairway store scheduled to be opened in Stamford, and this should ramp up the local competition if the store is anything like the fabulous unit opened by the company in Paramus, New Jersey, earlier this year. The other thing is that Stew Leonard’s is in the middle of a dramatic expansion and remodeling project, with new categories and products being added, giving the company’s original location a surge of new energy.

    This is, by the way, very smart. You don’t wait for the competition to open up before you start competing with it.

    Published on: October 26, 2009

    The Oregonian reports that “an ongoing dispute between Fred Meyer and 200 unionized grocery store checkers in Spokane has trickled down to Portland, where union representatives have been spotted leafleting shoppers and demonstrating in front of stores.” The union says that the Kroger-owned chain has been firing checkout people unfairly after making just one mistake, and it has refused to vote on a new contract until it achieves what it calls “progressive discipline and just cause."
    KC's View:
    What I find amusing about this story is that the union says that the chain “unfairly terminates checkers for giving the wrong change, sometimes after one error. Fred Meyer says the company maintains a policy of terminating workers who demonstrate negligence in cash-handling and that the Spokane workers are alone in contesting the rule. “

    This is amusing, in my view, since it isn’t like checkers have to do any actual calculations. They don’t make change ... they just hand it over. It isn’t like the old days, when I worked in retail, when we actually had to make change based on math we did in our heads. Nope...they just enter the cash handed over into the computer, which tells them how much to hand back. How hard is that? (The quarter is the big one, the dime is the small one, the penny is the copper one, and the bills all have big numbers on them...)

    So, aside from the fact that I am dismayed by the fact that I am telling any story that essentially starts with “back in the good old days,” I have to say that if a cashier can’t hand back proper change, I’m not sure how much I’d want them working the front end.

    Published on: October 26, 2009

    Business Week reports that in France, Auchan “is giving both Carrefour and Walmart a run for their money.”

    According to the story, “Over the past decade, Auchan has expanded rapidly into China, Russia, and Eastern Europe. Based near the northern French city of Lille, the privately held company is now the world's 14th-biggest retailer, with 1,200 stores in 12 countries and annual sales of $59 billion ... by many measures, Auchan is outperforming its bigger rivals in key global markets. In China, it is opening an average of two new stores per month, luring middle-class shoppers away from Wal-Mart and Carrefour by providing wider aisles, better lighting, and a higher-quality product range, says Shaun Rein, managing director of the China Market Research Group in Shanghai. Auchan now has 132 big-box hypermarkets in China, including 110 operating under the brand name RT Mart in a joint venture with a Taiwanese partner. That puts it neck-and-neck with Carrefour, but behind Wal-Mart, which has 146 stores and owns a stake in a joint venture that has another 104 outlets.”

    At the same time, Auchan seems to be performing well in markets ranging from Russia to Dubai...and while there has been some slowdown because of the global recession, Business Week reports that the retailer is “laying the groundwork” for further expansion.
    KC's View:

    Published on: October 26, 2009

    Starbucks announced late last week that it has resolved its lawsuit against its former executive, Paul Twohig, who it charged with breaching a non-compete clause when he went to work for Dunkin’ Donuts. According to the company, Twohig has agreed to complete his training at Dunkin’ donuts but won’t actually start working there until January 15, 2010, and also has pledged not to reveal any Starbucks trade secrets. Starbucks also will get $500,000 in compensation.
    KC's View:
    No player to be named later?

    Published on: October 26, 2009

    The Arizona Daily Star writes that local residents should “expect to see more and more Walmarts in town as the discount retailer makes a push into the Tucson market with a smaller store that will slide right underneath the city's big-box ordinance. First on the list is a 91,000-square-foot store at the southeast corner of Golf Links and Houghton ... The store would be about half the size of one of the company's traditional supercenters.”

    • Walmart said that it will launch a new technology support service designed to compete with Best Buy’s Geek Squad. helping consumers to set up consumer electronics products in their homes and also providing service options.

    According to the Reuters story, “shoppers can buy service plans on a prepaid card ranging from $99 to $339. The service spans help with basic television installation on the low end to setting up a home theater, wireless router network or a home office computer network. The service includes a preliminary consultation and a tutorial after installation is completed.”
    KC's View:
    What I’m waiting for is the moment that Walmart announces that it is opening a support service for people who buy good products in its stores - sort of an Apple genius bar for groceries. Just wait...there is a better than 50/50 chance that the Bentonville Behemoth is trying to figure out how to make it work. If it were to launch such an initiative, i would be a game changer in the food biz.

    Published on: October 26, 2009

    Ad Week reports on its new survey suggesting that eight percent of Americans think that Christmas advertising should begin after Labor Day, 42 percent say that after Halloween is most appropriate, and 35 percent say that marketers should wait until after Thanksgiving.
    KC's View:
    No question in my mind. Christmas advertising is like presidential election campaigns - way, way too long.

    Published on: October 26, 2009

    • The Wall Street Journal reports that Margaret Hamburg, commission of the US Food and Drug Administration, told the Senate Health, Education, Labor and Pensions Committee that the Senate bill overhauling food safety procedures needs to be tougher, with more funding. and with greater access to food production records.

    The Dallas Morning News reports that the American Booksellers Association has asked the US Department of Justice to launch an investigation into online book price wars being conducted by Amazon, Walmart and Target, driving the discounted price of best-sellers to $9. The trade association charges that the battle constitutes “illegal predatory pricing that is damaging to the book industry and harmful to consumers.”

    In addition the association charges that e-book pricing - like $9.99 for Kindle editions, for example - has created the environment for the price wars and also ought to be investigated.
    KC's View:
    What the American Booksellers really are worried about is a fundamental shift in how books are sold. I would suggest to them that all the investigations in the world won’t change what is happening, whether they like it or not.

    Published on: October 26, 2009

    ...will return.
    KC's View:

    Published on: October 26, 2009

    In Week Seven of National Football League action...
    Green Bay 31
    Cleveland 3

    San Diego 37
    Kansas City 7

    Indianapolis 42
    St. Louis 6

    Minnesota 17
    Pittsburgh 27

    New England 35
    Tampa Bay 7

    San Francisco 21
    Houston 24

    New York Jets 38
    Oakland 0

    Buffalo 20
    Carolina 9

    Chicago 10
    Cincinnati 45

    Atlanta 21
    Dallas 37

    New Orleans 46
    Miami 34

    Arizona 24
    NY Giants 17



    And, in the American League Championship Series, the New York Yankees defeated the Los Angeles Angels 5-2 in the sixth and deciding game of the best-of-seven series, earning the AL pennant and the right to face the Philadelphia Phillies in the World Series, which begins on Wednesday night.
    KC's View:
    And Mets fan’s long nightmare season continues...