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    Published on: May 18, 2010

    by Michael Sansolo

    For one second, think of the most inconceivable headline you could read this morning here on MorningNewsBeat.com. It could involve, say, Walmart going out of business, Coke and Pepsi merging or high fat diets getting the blessing of the surgeon general as the best step toward good health.

    What about this: Wegmans has been sold!

    Relax. None of these things have happened. (And this is not one of Kevin Coupe’s April Fool’s stories that amuse so many and irritate a few.)

    But imagine how shocked you would be if they did.

    At the moment, many of us look at Wegmans as the embodiment of excellence in this industry. In so many ways, its standards of excellence go beyond a company of its size. It’s okay for a regional company like Wegmans to build a deserved reputation for in-store excellence, premium fresh foods and a clear focus on customer needs. It’s a little more shocking that the family-owned company is also known for supply chain excellence, technological creativity and, of course, a stunning track record in personnel issues.

    Kevin had a great story about Wegmans on MNB yesterday, recounting how actor Alec Baldwin told David Letterman how his mom refuses to move away from snowy upstate New York. Sure her sons my be fabulously wealthy and living the good life in Southern California; Mrs. Baldwin will not dare move far from Wegmans.

    Now that’s a legend! And it’s why we’d be so shocked to find the company was being sold. (Which, I repeat, it is NOT.)

    My point is this. At the Food Marketing Institute (FMI) show last week I was accosted by multiple visitors from abroad who heard news almost as shocking to them; that Ukrop’s was sold.

    Their disbelief was easy to understand. For many years Ukrop’s, the family owned company out of Richmond, VA, was the epitome of excellence. For many years, other retailers talked of Ukrop’s prowess in prepared foods in almost reverential tones, saying its level of performance was simply impossible for anyone else to approach. Ukrop’s was seen as a model of a family owned business, innovating, changing and staying seemingly one step ahead of far larger competitors.

    In fact, years ago at one FMI conference Wall Street analyst lavished praise on the company even though it was one that Wall Street could not buy, sell or trade. Its reputation was that stellar.

    So the international visitors were rightfully shocked. The story of Ukrop’s demise - it was bought out by Ahold earlier this year if you happened to miss all the stories on this website - is that stunning. The reasons for the turn of fate are varied, depending on whom you ask. Every possible cause has been given from the lack of a new generation of family leadership to a growing disconnect with Richmond shoppers annoyed with Ukrop’s principled tradition of closing on Sunday and refusing to sell wine and spirits.

    For those abroad and at home, it should also be a cautionary tale about the fickle nature of excellence and a reminder that we all have to strive somehow to make tomorrow better than today no matter how lofty our performance. Pulling back and playing it safe is a strategy for an ending, not a future.

    Sadly, the story comes from one of the nicest families in the supermarket industry and one of the best retail crews you will ever meet. And in many ways the story should be shared throughout our companies along side the tale of how A&P fell from holding a larger retail market share than Walmart to a regional player today.

    We learn from the past or we repeat it…only with different players.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:
    Along these lines...

    I was chatting with one CEO who is a longtime MNB reader while at FMI last week, and he said that if he had one criticism of the site, it is that sometimes I am “in love with love.” By that, he meant that sometimes I allow my feeling for a company - sometimes a respect for tradition and reputation, sometimes simply affection for a firm’s leadership - to cloud my judgement. Ukrop’s flaws, he said, could be seen years ago, but I’d been blind to them until almost the end.

    On reflection, that seems like a fair criticism. Not sure how much I can do about it, except be more vigilant. But I thought it was worth mentioning, and Michael’s column gave me the opening.

    Published on: May 18, 2010

    MSNBC reports that “exposure to pesticides used on common kid-friendly foods — including frozen blueberries, fresh strawberries and celery - appears to boost the chances that children will be diagnosed with attention deficit hyperactivity disorder, or ADHD, new research shows. Youngsters with high levels of pesticide residue in their urine, particularly from widely used types of insecticide such as malathion, were more likely to have ADHD, the behavior disorder that often disrupts school and social life, scientists in the United States and Canada found.”

    In addition, “kids with higher-than-average levels of one pesticide marker were nearly twice as likely to be diagnosed with ADHD as children who showed no traces of the poison.”

    Researchers, MSNBC writes, “studied organophosphate pesticides, which account for as much as 70 percent of the pesticide use in the U.S. They work by interfering with the nervous systems of insects, but have a similar effect in mammals, including humans. Most people in the U.S. have residues of the products in their urine.”

    ADHD reportedly affects 4.5 million US kids.

    The study, done by researchers at the University of Montreal in Quebec, concludes that in order to reduce exposure to these pesticides, people should buy organic whenever possible, and wash fruits and vegetables as much as possible.
    KC's View:
    The chemical industry no doubt will be up in arms about this study, and will spend a lot of money trying to poke holes in it.

    I do know this. I talked to retailers yesterday who said that they think this is a very big deal, that they already have been talking to the media about the story’s implications, and they do not think the charges will go away any time soon.

    Published on: May 18, 2010

    The Healthy Weight Commitment Foundation (HWCF) joined with First Lady Michelle Obama and the Partnership for a Healthier America to announce a new pledge to reduce 1.5 trillion calories by the end of 2015, a decrease HWCF member companies intend to sustain in subsequent years.

    According to the announcement, the Healthy Weight Commitment Foundation manufacturing companies “will pursue their calorie reduction goal by developing and introducing lower-calorie options, changing recipes where possible to lower the calorie content of current products, or reducing portion sizes of existing single-serve products. These calorie reductions are in comparison with what was available in the marketplace in 2008.

    “The Partnership for a Healthier America, for which the First Lady serves as honorary chair, is an independent, non-partisan organization that is working to mobilize action around the specific goals of the Let’s Move! campaign to curb child obesity within a generation ... The Healthy Weight Commitment Foundation is working to promote ways to help Americans achieve healthy weight by balancing the energy (calories) they consume with the energy they expend through physical activity. Today, many Americans are consuming more calories than they expend. Many nutrition and health experts refer to this imbalance as the ‘energy gap’.”
    KC's View:
    There will be those who will say the Obama administration shouldn’t be getting involved in this stuff, and that the food companies should be responding to the markets, not perceived political pressure. But I have a hard time understanding the downside of these initiatives...

    Published on: May 18, 2010

    The United Food and Commercial Workers (UFCW) reportedly has joined in a lawsuit challenging the new Arizona law that makes it easier for local police to ask people they suspect are illegal aliens for their citizenship papers.

    “We believe S.B. 1070 is unconstitutional, un-American and that it undermines our nation’s rich immigrant history,” said UFCW International President Joe Hansen in a prepared statement. “The law effectively legalizes racial profiling and sanctions harassment and discrimination. We are filing this suit to protect the rights of our members and all workers in the state of Arizona—and to uphold the values and ideals that make our nation strong.”

    Also involved in the suit: the National Immigration Law Center (NILC), the National Association for the Advancement of Colored People (NAACP), the Mexican American Legal Defense and Education Fund (MALDEF), and the American Civil Liberties Union (ACLU).
    KC's View:

    Published on: May 18, 2010

    New York-based Price Chopper said that it has launched a comprehensive integrated diabetes management program -- Diabetes AdvantEdge – which will give diabetes patients more access to medication, increased support and information as well as educational opportunities on nutrition, healthy food choices, and diabetes management.

    “Diabetes patients will now have a single destination for their prescriptions, nutritional information and everything else they might need to help them manage their diabetes. As health professionals, nutrition specialists and providers of life-sustaining products, Price Chopper is both equipped and committed to turning the tide on diabetes,” said Vincent Mainella, the chain’s Vice President of Pharmacy.

    The company said that “the cornerstone of the Diabetes AdvantEdge program is its provision of free diabetes medications, such as metformin, glipizide and glyburide, which are those most commonly prescribed to patients managing diabetes. Patients filling these prescriptions will also receive free lancets and lancing devices to assist with the monitoring of their blood sugar. Price Chopper pharmacists, in their 1-on-1 consultations, will take a more active role encouraging and educating patients on the use of blood sugar recording logs as tools to enhance the communication of progress with their physicians.”
    KC's View:

    Published on: May 18, 2010

    The Las Vegas Review-Journal has a piece about how grocery delivery services seem to have found a niche in Sin City.

    According to the story, “Utah-based Winder Farms has been delivering milk, dairy products, organic produce and meats, all-natural frozen dinner entrees and other grocery items to Southern Nevada households since August 2006. The company has about 7,000 customers here, served by a delivery corps that heads out at about midnight to make their rounds, according to Sean McCrady, assistant general manager for Winder Farms Las Vegas. By 8 a.m., customers need merely to walk outside to find their food selections waiting for them in an insulated cooler.

    “Meanwhile, Las Vegas-based Prime Foods Inc. since 1982 has been delivering meats, prepared foods, quick-serve dinners and almost everything that can be found in a supermarket. In addition, delivery trucks for Minnesota-based Schwan's drop off an array of grocery items that includes its own private label pizzas and prepared foods. Bob Corscadden, Schwan's chief marketing officer, says many people become Schwan's customers only after ‘they see a truck and ask a neighbor’. Home delivery customers often use these services either to augment their trips to the supermarket or nearly replace them.”

    The Review-Journal writes that while there has been some reduction in the use of such services during recessionary times, the need for convenience and desire for customization - such as specific cuts of meet - that some of these services offer apparently outweigh the extra cost that home delivery entails.
    KC's View:
    Or maybe it is just the desire for convenience and the need for customization.

    Either way, it demonstrates the ongoing vitality of the online segment.

    Viva, e-grocery!!

    Published on: May 18, 2010

    Tesco-owned Fresh & Easy Neighborhood Market in the US said yesterday that it “will have its medium temperature cases in its 159 stores retrofitted with LED lighting, a landmark project made possible by the partnership of Nualight Ltd, a leading manufacturer of LED lighting solutions for retail, and Kysor/Warren, one of the top manufacturers of refrigerated cases in North America ... the project marks an extension of both companies' work with Tesco, and another step forward in their effort to offer food retailers a new choice in upgrading their refrigerated cases by creating more vibrant and brighter displays that are also energy efficient. All meat, dairy and fish cases will be upgraded to LED replacing the existing T5 Fluorescent canopy and undershelf lighting. Fresh & Easy currently uses LED lighting in external signs and freezer cases.”
    KC's View:
    There are two pieces of news here.

    Sources tell MNB that not only has Fresh & Easy decided to retrofit 159 store,s but it has ordered enough of this lighting equipment to outfit 150 new stores that are not yet open.

    Which suggests that maybe Fresh & Easy is getting its sea legs...and that those who have suggested that Tesco could pull out of the US anytime are misunderestimating Tesco’s resolve.

    Published on: May 18, 2010

    CNBC reports that the National Conference of State Legislatures (NCSL) has released a report saying that US states “could eliminate 13 percent of their combined budget gaps if there was an online sales tax ... According to the NCSL, state governments that collect sales tax - totaling 46 states and the District of Columbia - will lose an estimated $8.6 billion in potential revenue this year, with the loss projected to rise to $23.26 billion in 2012.”

    Opponents of an online sales say that its imposition would hurt a still young industry, while proponents say that the lack of such a tax puts brick-and-mortar retailers at a significant disadvantage.

    Current laws say that states can only charge sales taxes for online purchases if the online retailer has a physical presence - like a warehouse - in the state.
    KC's View:
    I’ve always been against an online sales tax, in part because I hate the idea of doing anything to hurt a burgeoning industry...and, to be perfectly honest, in part because it will hurt me. (I know that makes me a terrible human being, opposing taxes on selfish grounds, but there it is.)

    But now I am conflicted. I hate the idea of more taxes, and so reflexively oppose a new online sales tax. But the states are in trouble, and I’m not sure that it is fair to continue to let online retailers off the hook on this issue.

    The real question, I suppose, is what services will have to be eliminated by states if new revenue is not found. My experience is that a lot of people simultaneously want lower taxes and no fewer services ... which is, to say the least, a conundrum.

    Published on: May 18, 2010

    The Wall Street Journal reports that “a new study from the Harvard School of Public Health suggests that the heart risk long associated with red meat comes mostly from processed varieties such as bacon, sausage, hot dogs and cold cuts—and not from steak, hamburgers and other non-processed cuts. The finding is surprising because both types of red meat are high in saturated fat, a substance believed to be partly responsible for the increased risk of heart disease.”

    According to the study, the heart risk culprit may not be fat, but salt - “processed meats generally have about four times the amount of salt then unprocessed meats ... While the study is far from definitive, researchers said the findings suggest that people, especially those already at risk of heart problems or with high blood pressure, should consider reducing consumption of bacon, processed ham, hot dogs and other packaged meats that have a high salt content.”
    KC's View:
    Just in time for National Hamburger Month...which happens to be this month.

    So have that bacon cheeseburger...but hold the bacon.

    Published on: May 18, 2010

    • The Indianapolis Star reports on how a variety of supermarket companies - including Kroger, Marsh and Meijer - are embracing the cause of energy efficiency and aggressively seeking federal recognition for their efforts in both new and renovated stores.

    There are two goals, the Star writes. One is that environmental consciousness saves money. The other is that green practices also increasingly are seen as extremely positive by consumers.

    Reuters reports that the US Department of Agriculture (USDA) is setting “tougher food safety guidelines” for companies that sell ground beef to federal food and nutrition programs - testing it more frequently and banning certain trimmings.

    According to the story, “The new requirements will be applicable to ground beef contracts awarded on or after July 1, 2010. They are part of a range of initiatives announced in February to improve the safety of food purchased for school lunch and nutrition assistance programs. Overall, the government spends $17 billon a year on child nutrition, chiefly school lunches. Nearly 32 million children are fed daily through the school lunch program and about 11 million pupils are in the school breakfast program. Some 63 percent of the meals are free or available at a low price.”

    USA Today is out with a study suggesting that “new credit card and overdraft restrictions will save U.S. consumers from being charged at least $5 billion in fees this year alone at the largest U.S. retail banks and credit card companies ... The analysis - based on institutions' own estimates - comes during a year when new rules are kicking in to address unfair credit card rate increases and steep bank overdraft fees. It highlights the sizable dent these rules will have on an industry blamed for pushing consumers deeper into distress during the recession.
    KC's View:

    Published on: May 18, 2010

    Tonight at 7:30 pm, the Darien Public Library in Darien, Connecticut, will sponsor a talk by Kevin Coupe about “The Big Picture: Essential Business Lessons from the Movies,” followed by a free screening of Bottle Shock, which was featured in the book. If you’re in the area, we hope you’ll come by and say hello.
    KC's View:

    Published on: May 18, 2010

    ...will return.
    KC's View: