retail news in context, analysis with attitude

• The Los Angeles Times reports this morning that “the U.S. Department of Agriculture's Economic Research Service released its 2011 Consumer Price Index analysis for projections on food prices this week, and reported that overall food prices are expected to increase 2% to 3% this year.

“The projected rise comes after a stretch of relative price stability in recent years. The agency's all-food index showed a modest 0.8% increase from 2009 to 2010, and a rise of just 0.3% in prices for food consumed at home, the lowest food inflation rates seen in the U.S. since 1962 and 1967, respectively.

“However, food prices are expected to rise even more this year, agency researchers said. The causes include rising commodity prices, shrinking supplies of key ingredients and increasing demand for corn-based ethanol for vehicle fuel.”

• The Chicago Sun Times reports this morning that Supervalu is closing a Jewel-Osco store on Western Avenue on the city’s South Side, one that has been serving the local community for a quarter-century. However, the story notes, “residents will soon have a smaller, lower-cost and limited-assortment grocery alternative when Save-A-Lot opens five stores Feb. 24 on Chicago’s South Side, including one at 6701 S. Western Ave., a company spokeswomen said.

• The New York Times this morning reports while the US Food and Drug Administration (FDA) planned “to begin tests this month on the milk from farms that had repeatedly sold cows tainted by drug residue,” in an effort to assure that Americans are not drinking contaminated milk, “the testing plan met with fierce protest from the dairy industry, which said that it could force farmers to needlessly dump millions of gallons of milk while they waited for test results. Industry officials and state regulators said the testing program was poorly conceived and could lead to costly recalls that could be avoided with a better plan for testing.

“In response, the F.D.A. postponed the testing, and now the two sides are sparring over how much danger the antibiotics pose and the best way to ensure that the drugs do not end up in the milk supply.”

Reuters reports that the Chinese government has fined both Walmart and Carrefour “for either over-stating their discounts by inflating pre-discounted prices, or for charging prices higher than what was labeled or advertised.

“Carrefour and Wal-Mart had engaged in such practices in various Chinese cities including Shanghai, Kunming, Shenyang, Harbin and Chongqing, the commission said on its website. Worried about rising price pressures, the Chinese government usually conducts random checks of store prices ahead of holidays, especially when the country is fighting inflation.”

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