business news in context, analysis with attitude

These are some of the stories that were reported in the media while MNB was taking time off last week (with KC’s Views noted in italics)

  • California Attorney General Bill Lockyer filed a lawsuit against McDonald's, Burger King and KFC, as well as H.J. Heinz, the maker of Ore-Ida frozen potato products, Procter & Gamble, which makes Pringles, and Kettle Foods Inc., creator of Kettle Chips, for not warning consumers about the presence of the carcinogen acrylamide in their products.

    The lawsuit was the first of its kind filed in any state, and is based on what Lockyer says is a violation of California Proposition 65, which says that consumers have to be warned when exposed to carcinogens or toxic chemicals.

    The accused companies say that the posting of such a warning would needlessly scare consumers.

    While we have to admit to being a little leery about an excessive propensity for labeling that seems to be taking places in some segments of society, we are even more annoyed by phrases like “would needlessly scare consumers.” We are one of those consumers, and there are very few people or organizations that we trust to decide what a legitimate scare is or is not…especially when the profit motive might be the supreme motivation for those making the decision. We’d like to make that decision for ourselves…and, unfortunately, that may mean ‘excessive’ labeling… which may not seem so excessive to people who get sick.

  • CBS reported last week about the small controversy that broke out in Chicago when a North Side Italian beef stand named one of its dishes - thinly sliced, fried potatoes smothered in Italian beef gravy, Bar-B-Que sauce, onions, cheddar cheese, and hot peppers – “ghetto fries.”

    While we hate to be politically correct, it seems just possible that the phrase “ghetto fries” carries too many negative connotations to be acceptable. The culinary creation may be tasty, but the name seems unnecessarily tasteless.

  • The Sacramento Bee reported on the Food Marketing Institute (FMI) study saying that people are more dissatisfied with the checkout experience in supermarkets than any other part of the trip, and that almost a quarter of those surveyed said that they wanted improved customer service at their food stores.

    What is really extraordinary is that while customers keep saying these things and FMI keeps reporting them, too many of the nation’s food retailers end the shopping experience impersonally and without style or panache – which is amazing, since you’d think they would want to somehow soften the moment when people actually have to hand over money.

  • Online Media Daily speculated about whether the decision by to feature some 40,000 adult-oriented SKUs in the “Sex and Sexuality” section of its health and personal care section might cause a backfire among some consumers. While some analysts believe that such a reaction could occur among more conservative consumers, others believe that the product selection is relatively tame – though the need for some sort of age verification system might be highlighted by the move.

  • In The Netherlands, Ahold’s Albert Heijn chain of supermarkets reportedly has launched a new round of price cuts in order to regain some of the market share lost during the company’s recent accounting scandal. However, the report of the price cuts by Dow Jones has been disputed by the company, which said it was just continuing an ongoing policy of lowering prices.

  • The Wall Street Journal reported last week that Supervalu’s value-driven, no-frills, limited assortment format, Save-A-Lot, “has quietly become one of the nation's most successful grocery chains by courting a demographic supermarkets have long ignored: the poor…blanketing the country with tiny, cheap stores catering to households earning less than $35,000 a year, generating higher profits than most grocers while doing so.”

    Ironically, the WSJ noted that as Save-A-Lot expands its presence in the hard discount arena, there are also new and old competitors – such as dollar stores and the 27-store Super Saver subsidiary begun by Albertsons. It was just last Friday, or course, that Albertsons announced that it was investigating strategic alternatives that are likely to lead to the company being sold – suggesting that Super Saver was too little or too late to save Albertsons.

  • In Belgium, Carrefour announced price cuts on some 500 SKUs – a move that its competition, Delhaize and Colruyt, each said they would immediately match.

  • Tesco is buying 30 c-stores/gas stations from William Morrison Supermarkets. Terms of the deal were not disclosed. Tesco said that the acquisition will give it a six percent market share in the UK convenience store business.

KC's View: