business news in context, analysis with attitude

Published on: October 3, 2012

by Kevin Coupe

Talk about a shotgun marriage ... and this time, the shotgun is the recession.

The Dallas Morning News has reported that "more than 50 exclusive and limited-edition items designed by 24 American designers will be sold at both Target and Neiman Marcus stores, and those items will also be included in the Neiman Marcus Christmas Book."

Neiman Marcus, of course, is the very definition of luxury shopping, and Target has always made its bones on "cheap chic." Analysts suggest that there may actually be a number of people who shop at both, and so this collaboration may make a kind of sense, as people look to be fashionable without always spending ton of money.

The items involved in the promotion will be priced as low as $7.99 and as high as $499.99.

Gregg Steinhafel, chairman, president and chief executive officer of Target, calls this a "redefining moment in retail." I'm not sure about that ... but at the very least, it represents a unique way of looking at the world and marketing to shoppers.

And I think it is the kind of unconventional thinking that can lead to Eye-Opening results. Or at least attention.

Published on: October 3, 2012

Bloomberg reports that Ron Burkle's Yucaipa investment group is one of several entities interested in acquiring some of Supervalu's assets.

Troubled Supervalu has been engaged in a strategic review of its options for several months, as it seeks ways to maximize shareholder value. According to Bloomberg, "The supermarket chain is weighing a new direction after losing more than $2.5 billion over the last two fiscal years, hurt by competition from discounters and costs to run stores. The market value of Supervalu, led by Chief Executive Wayne Sales since his predecessor's ouster two months ago, has dropped by more than three-fourths since the end of 2010."

The story says that Kohlberg Kravis Roberts, TPG Capital, Spartan Stores, and Cerberus Capital Management are among those , in addition to Yucaipa, interested in acquiring parts of Supervalu, though not the whole thing: "Supervalu would prefer a deal for the entire company and has extended its offer deadline past Oct. 15 ... The third-largest U.S. grocer may face difficulty because it has almost a dozen retail banners, some pharmacies and a distribution business, and few bidders would want to keep all of them."

Published on: October 3, 2012

Toys R Us said yesterday that it is offering a "price match guarantee" during the upcoming end-of-year holiday season, saying that it "will match competitors' in-store pricing on identical items, any time a customer presents a local competitors' current, valid print advertisement showing the item available for less."

Shoppers will have seven days to get a price adjustment if they find an item advertised for less by a competitive bricks-and-mortar store; the company will also match prices from its own online sites if they happen to be lower than those offered in stores.

However - and this is a big caveat - the price match guarantee does not include prices offered by online competitors such as Amazon.com. It also does not include items "known to be widely out of stock or available in limited quantities."

Published on: October 3, 2012

Richard Brasher, who held a series of top executive positions at Tesco and helped to lead the company to its position as the third-ranked global retailer, has been named CEO of Pick n Pay in South Africa, effective February 2013.

Brasher stepped down from Tesco last March.

Pick n Pay chairman Gareth Ackerman, son of the company's legendary founder, Raymond Ackerman, said that the company was "extremely fortunate" to have landed Brasher, who is expected to bring the company vast experience and insight when it comes to online retailing, loyalty marketing, and private label - all traditionally areas of great strength for Tesco.

The South African retailer, which has been under pressure of late in part because of Walmart's entry into the market, lost its CEO last February when its then-leader, Nick Badminton, stepped down after five years "to spend some quality time with my family and my bicycle."

Published on: October 3, 2012

• Bloomberg reports that Walmart has been sued in federal court in Tennessee "for allegedly discriminating against female workers in five southern states.

"Three women sued in Nashville today, seeking to proceed on behalf of Wal-Mart’s female employees in the company’s Region 43, which comprises Tennessee and parts of Alabama, Arkansas, Georgia and Mississippi. Wal-Mart paid women less than men in comparable jobs and blocked promotions for female workers, the women claim ... The Tennessee plaintiffs seek to represent current and former female workers from December 1998 to the present. They are seeking changes to Wal-Mart practices as well as back pay and punitive damages."

This is the third regional gender discrimination lawsuit to be filed against Walmart since the US Supreme Court ruled that a nationwide class action suit against Walmart could not go forward, saying that the various cases did not have enough in common to justify a class action.

Published on: October 3, 2012

Yesterday,MNB reported that Seattle-based PCC Natural Markets has written a $100,000 check to support a Washington State initiative that would require the labeling of genetically engineered ingredients in products, an initiative that it described as being "very similar" to California Proposition 37, which is on the ballot and will be voted on this November 6.

In washington, proponents are hoping to get the issue on the ballot in 2013.

In my commentary, I wrote:

I'm not entirely sure how similar the Washington State bill is to the California version; I've read the “The People’s Right to Know Genetically Engineered Food Act," and it looks to me like retailers could be held responsible for products that don't meet the mandates, and that there is plenty of opportunity for lawyers to get rich no matter what side they represent. (Legislation can be tough to decipher. God, I wish they'd write in plain English.)

I believe in GMO labeling, but I am persuaded that the California Proposition is hardly the best way to go. It puts the onus on retailers and is going to make too many trial lawyers wealthy. I also think that a national approach would be better. But, it appears the California approach may be the price that the food industry will have to pay for not taking the initiative on labeling before the government got involved.

Well, apparently I need to take a course in legislative bill reading, because Trudy Bialic, director of public affairs for PCC, sent me the following statement:

"Fact is:  I-522  clearly states who IS responsible for labeling: seed and seed stock suppliers, and manufacturers. (Retailers are NOT named.) Additionally, there is a whole section in both Prop 37 and I-522 that explains who is exempt.

"The exemption language in both Prop 37 and I-522 says that if a company does not intentionally use GMOs, and yet some GM material inadvertently or unintentionally happens to contaminate the product (it could be at any level), that does not compromise the product and the company does not have to label it as containing GMOs.  The essence of it is:  as long as you take reasonable measures to avoid unintentional contamination, an affidavit that documents these efforts is all you need to comply with Prop 37 or I-522, and avoid having to label your products as 'contains GMOs' or 'May contain GMOs.'

"Affidavits must be provided by suppliers, and this is why seed or seed stock suppliers, and manufacturers are named as responsible for labeling. They have to know where their materials come from.  After all, contamination of the seed supply is where 99% of the contamination originates anyway –  not through cross-pollination, or at other points throughout the supply chain. (Also, we designated seed and seed stock suppliers because GMO soy comes off patent next year and, theoretically at least, GMO soy could be sold to a farmer without his knowledge, especially if s/he pulls their truck up to a bulk seed dispenser, so seed suppliers are named to protect farmers.)

"As for creating opportunity to make lawyers rich, it’s an argument that has been used against many consumer-friendly measures, from mandatory seatbelt laws to nutrition labeling.  Remember, we didn’t have calorie and nutritional information on food labels until 1990.  Country-of-origin labeling wasn’t required until 2002. The trans fat content of foods didn’t have to be labeled until 2006.  These labels did not  cause food costs to soar, nor did they prompt a flood of lawsuits that made a nation of lawyers rich.  These common sense labeling laws are accepted now as important, and used by consumers every day.  I suspect (although I can’t prove) this charge that labeling initiatives would make lawyers rich is because lawyers rate so low in popularity surveys, as in what professions are respected and admired. (If you say lawyers will benefit, it will convey negativity.)

"The truth is, the companies that are pouring money into defeating mandatory GMO labeling, such as ConAgra, General Mills and Kelloggs, already are complying with mandatory labeling laws around the world. Labeling did not cause disruption or chaos in their market sourcing or distribution. Their businesses overseas continue to prosper. 
 
"GMO foods already are labeled, by law, in 49 countries including China, Japan, South Korea, Taiwan, Australia, New Zealand, Indonesia, Malaysia, Thailand, Brazil, Chile, Colombia, South Africa, Saudi Arabia, Egypt, Sweden, Switzerland, Norway, Denmark, Ireland, the United Kingdom, Portugal, Spain, France, Greece, Croatia, Poland, Hungary Russia, Italy, Germany and all the other nations of the European Union.  
 
"Passing I-522 and Prop 37 would give us the same transparency on labels that these companies already are giving other customers overseas."

Published on: October 3, 2012

• Tesco this morning said that its first half profit was down 10.5 percent to the equivalent of $2.58 billion (US), while its UK profit was down 12.4 percent. However, in the UK, where Tesco has been dealing with declining market share and tough competition, sales for the last quarter were up 0.1 percent, which Tesco - and analysts - suggested meant that an investment scheme designed to revitalize the company may be working.

Published on: October 3, 2012

...with brief, occasional, italicized and sometimes gratuitous commentary...

• The Wall Street Journal reports that beer shipments in the US "are rising for the first time since 2008 in another sign that consumers—particularly young men—are slowly but surely emerging from the recession."

According to the story, "Much of the rebound is being driven by small-batch "craft'' brewers, reflecting shifting tastes and forcing dominant players Anheuser Busch InBev and Miller Coors to increasingly borrow from upstarts' playbooks. Big brewers also are rolling out alternative malt beverages after liquor companies swiped drinkers."

Just want to say that I've been happy to help...

• KCOY-TV reports that "after nearly five-months of being empty, nationwide supermarket chain Albertsons is moving into the building once home to Scolari's in San Luis Obispo ... The store is scheduled to open for business the summer of 2013 and construction to remodel the 30,000 square foot store is scheduled to begin next spring."

The move by Albertsons is said to be the first time in years that it has acquired a lease from another company, and it comes just months after, as the story notes, "Albertsons announced it was laying off more than 2,000 workers at its stores in Southern California and Nevada."

• Kroger Co. associates working at Fry's Food Stores and Smith's Food and Drug in Arizona have ratified a new labor agreement with UFCW Local 99. The contract covers more than 15,000 Fry's associates working in 121 stores in Phoenix, Tucson, and throughout the state of Arizona. It also covers 427 Smith's associates working in Kingman, Bullhead City, Ft. Mohave and Lake Havasu.

• The Fresh Grocer will open its first New Jersey supermarket location on Friday, November 2nd in New Brunswick, NJ - a 50,000 square foot store that will serve, the company says, a community that "has been without a full service supermarket for over 20 years."

Published on: October 3, 2012

• Arizona-based Bashas' said yesterday that it is working with MyWebGrocer, which will now power new digital services for 63 Bashas’ stores and 48 Food City locations in the Southwest. With MyWebGrocer’s services, customers can opt in at www.bashas.com and www.myfoodcity.com to receive weekly e-mails with ad specials, shopping lists, meal ideas and more.

Full disclosure: MyWebGrocer is a longtime and valued MNB sponsor.

Published on: October 3, 2012

... will return.

Published on: October 3, 2012

Adam Greenberg struck out yesterday, and his major league career ended. It was almost certainly one of the best days of his life.

Greenberg, 31, actually came to the plate for the first time when playing for the Chicago Cubs in July 2005. The first pitch thrown to him, a 92-mile-per-hour fastball, hit him in the head, leaving him with blurry vision, headaches and vertigo. However, he has spent the last seven years working his way back, playing in the minor leagues for unaffiliated teams like the Bridgeport Bluefish. It seemed like Greenberg would never again make it to "the show," but he kept playing.

Greenberg's case came to the attention of Matt Liston, a filmmaker, who started an online campaign to bring attention to Greenberg's case. And last month, the Miami Marlins made him an offer he could not refuse - a one-day contract that would allow him to come to the plate one more time.

That game happened yesterday. The Marlins were playing the New York Mets, so the game had no bearing on the playoffs. Greenberg came up in the sixth inning as a pinch hitter - and just his luck, he faced off against RA Dickey, the knuckleballer who has been having a career year for the otherwise awful Mets.

Dickey threw Greenberg three pitches - high and fast knuckleballs - and Greenberg fanned.

“It was magical," Greenberg said afterwards. "The energy that was in the stadium was something that I have never experienced in my life, and I don’t know if I’ll ever experience that again."