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    Published on: December 16, 2009

    The Syracuse Post-Standard reports that Golub Corp.’s Price Chopper is looking to acquire 22 P&C stores from bankrupt Penn Traffic for $54 million.

    According to the story, “So far, it is the highest bid in the bankruptcy filing ... outpacing a previous bid of $36.5 million fronted by liquidators representing an unknown buyer for the entire 79-store chain and all of its assets.” There has been speculation in the local media that Tops could make a bid for some or all of Penn Traffic’s stores, and there also have been reports that an “insider” could be preparing a separate bid.

    As noted by the Post-Standard, Penn Traffic “filed for Chapter 11 bankruptcy protection from its creditors on Nov. 18. It is the third Chapter 11 bankruptcy filing for Penn Traffic in 10 years. In the previous two filings, the company reorganized. In this filing, it told U.S. Bankruptcy Court in Wilmington, Del., where its case is being heard, it wants to essentially have a fire-sale of all of its asset, closing on sales by the first week in January,” though the competition for its assets could make such a timetable problematic.
    KC's View:
    If I were a P&C shopper, I’d be praying that a company like Price Chopper would buy my local store. It would the best kind of assurance that I’d have access to a smart, competitive, innovative retail experience.

    Published on: December 16, 2009

    The Denver Post reports that unionized supermarket employees in Denver have come to a split decision - those who work for Kroger-owned King Soopers and City Market voted to accept a new labor contract, while those employed by Safeway rejected its contract offer.

    While the vote tallies have not yet been made public, the word from Denver is that the Safeway contract rejection was overwhelming. While the retailer had said that its contract proposal was its last, best and final offer, the sense is that Safeway will be under greater pressure now to return to the bargaining table since King Soopers has avoided a strike and/or lockout.

    According to the story, “Despite the rejection by most Safeway employees, a strike cannot take place because fewer than two-thirds of the union workers voted to authorize a work stoppage.”
    KC's View:
    Oy. What a mess.

    Published on: December 16, 2009

    Mike Jackson, the former COO of Supervalu, was named yesterday as the new president/CEO of the National Grocers Association (NGA), succeeding Tom Zaucha, the organization’s longtime chief executive.

    In addition to a 30-year career at Supervalu, Jackson also has served as the chairman of NGA.

    Chris Coborn, president/CEO of Coborn’s Inc. and the current chairman of NGA, said in a prepared statement: “Mike possesses the industry knowledge, professional experience, leadership skills and passion to lead NGA to the next level of excellence in representing and serving the independent retailer and wholesaler ... Mike Jackson has spent the majority of his career working directly with independent operators. He fervently believes in the unique role that we play in serving the consumer and is passionately committed to our future.”

    The appointment takes effect on March 1, 2010. Zaucha’s retirement date is June 30, after which he will serve as NGA’s president emeritus.
    KC's View:
    I like to think of this as the Hank Armour model. Armour was a convenience store retailer before he was tapped to be CEO of the National Association of Convenience Stores (NACS), and his tenure there has been ambitious, entrepreneurial and effective. (If I were Mike Jackson, Armour is one of the first people I’d have lunch with upon coming to Washington.)

    Since the sweeping changes of leadership at Supervalu that began with the naming of former Walmart executive Craig Herkert as CEO, there is a concern among at least some of the independents served by the company that Supervalu is less focused on independent grocers - and a lot of that has to do with the departure of people like Jackson.

    They’ll now have this passionate advocate working for them at NGA, as Jackson makes the move to DC. Together with leaders such as Armour and Leslie Sarasin, the new CEO at FMI, it will be interesting to see how they redefine the roles and activities of trade associations.

    Published on: December 16, 2009

    by Kate McMahon

    Fact: Employees are online shopping on the job, more than ever before.

    Fiction: The only way to stem the tide is to ban social networking in the workplace altogether.

    Bottom line: Rapid changes in modern technology require employers to utilize an old-fashioned tool – common sense.

    That’s the takeaway from the surveys, articles and internet exchanges about this hotly-debated topic, which could reach a boiling point this week.

    All of the numbers point to an increase in online shopping this holiday season – some 57.1 million Americans are expected to hit click and ship for their family and friends and Cyber Monday sales were up 5% to $887 million.

    And since the all-important deadline for free shipping ends tomorrow at Amazon.com and other big hitters, shoppers across America are going to be racing the clock to wrap up their internet shopping in the next 36 hours. And many will be at work.

    Just how many? A recent survey for ISACA, a trade group for information tech professionals, showed that employees on average plan to spend almost two working days – 14.4 hours – shopping online in November and December. That is almost triple the five hour average cited in a similar 2008 survey.

    In a separate survey of 1,500 ISACA members, 25% estimate the productivity loss from online holiday shopping at work at $15,000 or more per employee.

    The alarming numbers from the first survey fuel the fears of companies that are skittish about social networking in the workplace. A recent study found that some 40% of the executives whose firms did not utilize social media were concerned about confidentiality, security and employee productivity.

    Take it from the experts, as in the tech gurus at ISACA: social networking is here to stay, and it is “unrealistic” that firms can completely stop on-line shopping. What employers can and absolutely should do is educate their staff about their internet policy and potential security issues of online shopping, including viruses, spam and phishing attacks. Start a dialogue, articulate well-defined parameters (such as e-commerce access during lunch hour), and keep the lines of communication open. Allowing a hard-working employee to place an online order rather than rushing to the mall before picking up the kids has very little downside.

    Forward-thinking companies have already embraced social networking, knowing that it is a key component in engaging consumers and developing a two-way relationship with them. To not engage because of “productivity” or shopping concerns is short-sighted, particularly in today’s competitive and quickly evolving marketplace. As the CEO of a public relations firm wrote on a blog: “Those who learn to appropriately use new tools will soon be well ahead of the game than other organizations that fear and don't understand them.”

    And while shopping is top of mind today, the issue is more far-reaching. I’ve read many posts on this topic this week, and not surprisingly some of most insightful comments came from MNB readers.

    Wrote one: “Everything in moderation. When it comes to rules, zero-tolerance is not the answer, especially when dealing with adults. Everyone bends the rules occasionally, but abuse of any company resource shouldn’t be tolerated.  Shopping on your lunch break, as long as your employer doesn’t have internet bandwidth issues, should be tolerated.  Surfing all day long should not.

    “Employers need to put trust in their employees that they will do the right thing.  If something is being abused, then someone will say something to someone who will do something about it.  But forbidding a relatively harmless activity is never the answer if that activity improves morale and increases loyalty to the employer.”

    Common sense and sound business sense.

    Kate McMahon can be reached via email at kate@morningnewsbeat.com .
    KC's View:
    An interesting postscript here. According to an anonymous survey of 22 CPG companies conducted by the Grocery Manufacturers Association (GMA) and released at GMA’s Social Media Forum last week, while only 47.4 percent of CPG companies have more than a cursory social media presence, 63.6 percent of respondents are shifting resources from traditional to social media.

    Now, this survey focuses on how companies are using social media to engage with shoppers. What all of these companies need to do is also pay attention to how social media allows their people to engage with each other. It allows them to talk about their jobs, their companies, their products, and how their hopes and dreams dovetail with reality ... all things that employers have to think about, because it gives so much transparency to their inner workings.

    Published on: December 16, 2009

    The Wall Street Journal reports this morning that “a working group made up of officials from several federal regulatory agencies Tuesday proposed restricting marketing of foods and beverages that contain significant amounts of sugar, sodium and saturated fat, in response to concerns about childhood obesity ... The recommendations of the group, which was created by Congress, reflect concerns that current marketing practices are influencing children's eating habits.” The US Congress will be presented with the recommendations next year,, following a period of public comment, at which point it will have to decide whether to take legislative action.

    The working group is made up of officials from the Federal Trade Commission (FTC), the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC).

    However, a spokesperson from the Grocery Manufacturers Association (GMA) suggested that voluntary moves by the food industry already are having some impact, and that new rules and regulations would be redundant. Mary Sophos, GMA’s Senior Vice President and Chief Government Affairs Officer, said that manufacturers are “continuing to provide a wider range of nutritious product choices and marketing these choices in responsible ways that promote healthy lifestyles.  We have joined with others in launching the Healthy Weight Commitment Foundation to promote ways to help people achieve a healthy weight through energy balance – balancing calories consumed as part of a healthy diet with calories expended through physical activity.”

    Among the improvements cited by GMA: Studies say that “children viewed 31% fewer food, beverage and restaurant ads on children’s programming from 2004 to 2008,” as well as viewed fewer such ads on television general. In addition, “children are seeing more ads for fruits and vegetables on all TV as well as kids’ TV.”
    KC's View:
    It is almost impossible to imagine that Congress will be able to focus on this issue with any degree of common sense. There will be a lot of noise, a lot of hearings, and if they come out with any legislation it probably will be watered down, ineffective and annoying.

    Published on: December 16, 2009

    Crain’s Chicago Business reports that PepsiCo’s Gatorade unit will spend $30 million on product and packaging innovations that it hopes will bring “meaningful” change to the category.

    According to the story, “As part of the new product introduction, the core Thirst Quencher and G2 lines will also receive another facelift, the second in just over a year.” The new packaging is described as being "more functional,” and will replace designs created by Peter Arnell - who also created new packaging for PepsiCo’s Tropicana brand that had to be replaced because of consumer confusion. “The redesigned graphics will more prominently feature a low-calorie message for the G2 brand, which will have its calories reduced to 20 per 8-ounce serving, from 25,” Crain’s writes. “A spokesman declined to comment on the redesign of the Thirst Quencher products beyond saying that the brand is committed to G, the logo it introduced last year.”

    In addition, the story says, “New products will include Prime, which will be sold in 4-ounce pouches and come in three flavors. Prime is meant to be consumed just before exercise and includes carbohydrates, sodium and potassium. Recover, another new product, is meant to be used after exercise and will be sold in 16.9-ounce bottles, with three flavors and 16 grams of whey protein.”

    Note: After this story was originally posted, Gatorade officials pointed out to both Crain’s and MNB that Peter Arnell had done the redesign work for Tropicana, but not for Gatorade. We regret the error.
    KC's View:
    Based on the behavior of one of Gatorade’s more prominent athlete/endorsers, maybe they also should include some saltpeter.

    But joking aside, the Gatorade story raises a lot of issues about the importance of branding, especially in a company that apparently has made two significant missteps in the past year or so. We go through a fair amount of Gatorade in our household, but I have to say that very little that has been changed about the line has clarified what its role in an athlete’s life ought to be - in fact, the waters seem to have been muddied a bit.

    Now, it sounds like the folks at Gatorade are working to change that...but they also run the risk of confusing consumers even more. And these developments - combined with the Tropicana debacle - tell a cautionary tale about how one has to nurture a brand.

    Published on: December 16, 2009

    • Albertsons LLC has reached an $8.9 million settlement with the Equal Employment Opportunity Commission (EEOC) in a case involving more than 160 African-American and Hispanic workers who complained of having been subjected to racial discrimination, taunting and slurs by fellow employees who were white supremacists and anti-immigration. The events in question took place at a distribution center near Denver, and while Albertsons says that the problems predated its operation of the warehouse, it reached the agreement as a way of avoiding costly litigation.

    • Kroger announced yesterday what it called “a first of its kind loyalty program that rewards frequent shoppers with free wireless service using the company's own wireless phone service, branded i-wireless. The Free minutes rewards program enables customers to earn free airtime on their i-wireless phone when they purchase groceries at the Kroger family of stores. i-wireless is exclusively available in more than 2,200 Kroger-owned stores nationwide.

    • McDonald’s said yesterday that beginning in January 2010, it will offer free wireless internet service at the 11,000 of its US restaurants that up to now have been charging for Wi-Fi. The company framed the move as a challenge to Starbucks, which does not offer free internet access except to customers who spend a certain amount of money.
    KC's View:

    Published on: December 16, 2009

    • Jean-Marc Huet, the executive vice president/CFO at Bristol-Myers Squibb, reportedly is joining Unilever as that company’s chief financial officer.

    • The California Grocers Association (CBA) announced that it has hired Kara Bush as manager of Government Relations, serving as the organization’s second in-house lobbyist.
    KC's View:

    Published on: December 16, 2009

    ...will return.
    KC's View: