retail news in context, analysis with attitude

• The Wall Street Journal reports that while analysts are enthusiastic about the decision by Safeway to sell its Canadian operations to Sobeys for $5.7 billion, there is concern in some quarters about the company's future.

The story says: "Cantor Fitzgerald analysts compared the sale to 'burning off the furniture to save what’s left of the house,' though the house they describe sounds rather unsteady. The analysts said that without a gift-card unit Blackhawk that was spun off into an IPO earlier this year and without Canada, Safeway is left with a U.S. operation Cantor says has a 1.3% operating margin. 'We have felt for some time that any steps by Safeway to monetize Blackhawk and the Canadian businesses would serve to expose the U.S. operations in a much more negative light,' the analysts wrote. 'We think that reality has taken shape now that Safeway has spun off its main growth vehicle (Blackhawk) and sold its largest and most stable earnings stream (Canada)'."


• There are numerous press reports saying that Lidl, the Germany-based discount retailer that operates more than 10,000 stores across Europe, is considering a US entry, though the feasibility studies are not expected to be completed until late next year at the earliest.


• The Associated Press reports that the lawsuit filed by Associated Wholesale Grocers (AWG) against the United Potato Growers of America - "accusing America's spud farmers of driving up prices while spying on farmers with satellites and aircraft fly-overs to enforce strict limits on how many tubers they can grow" - has been moved to the US District Court in Idaho and may be combined with a similar federal suit that was filed there in 2010. AWG contends that "potato growers have banded together for a decade to illegally inflate prices in a scheme akin to the petroleum-producing OPEC cartel, reducing planting acreages and destroying potatoes to restrict what is available for sale."

"And while the U.S. Department of Justice hasn't joined this case," the AP writes, "its lawyers have been examining how large, modern agricultural cooperatives like the United Potato Growers are employing nearly century-old antitrust exemptions to strengthen their hands."


Marketing Daily reports on a new study from IRI saying that "compared to grocery and drug stores ... convenience stores were the only channel to grow in both dollar and unit sales in 2012 ... Led by such giants as 7-Eleven, Shell, and BP, IRI says there are now some 149,000 convenience stores, with roughly two-thirds owned by independents. Increasingly, these stores are stepping away from their cookie-cutter roots, adding kiosks, healthier food options, fresh foods and payment innovations."


• Is Splenda less than splendid?

Yahoo! News reports on how the "Center for Science in the Public Interest (CSPI) has downgraded sucralose (known by the brand name Splenda) from a 'safe' rating to 'caution' in its Chemical Cuisine guide after an Italian laboratory found the sweetener caused leukemia in mice."

“Sucralose may prove to be safer than saccharin, aspartame, and acesulfame potassium, but the forthcoming Italian study warrants careful scrutiny before we can be confident that the sweetener is safe for use in food,” CSPI executive director Michael F. Jacobson said in a statement.
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