business news in context, analysis with attitude

Quite a week to take a vacation. Charlie Gibson retires and Diane Sawyer becomes the anchor of the ABC World News. Don Imus leaves the RFD Network and goes to the Fox Business Channel. And today, Tony Kornheiser returns to daily radio on WTEM-980 in Washington, DC.

There were some interesting business stories, too…and some of the ones I thought worth noting follow…

• The Wall Street Journal reported that Walmart has begun using its website to sell merchandise from outside retailers, an effort that added an estimated one million SKUs to its online offering. Walmart handles the transaction but not the fulfillment – it never touches the merchandise.

The move put Walmart in even more direct competition with, which offers a similar service.

• The Washington Post reported that “labor groups renewed their campaign against Wal-Mart on Tuesday, launching a coalition that calls for improvements in the company's wages, health care, and environmental and labor policies.” Ironically, the campaign comes after Walmart CEO Mike Duke came out in favor of the Obama administration’s call of mandated employer-provided health care benefits as part of a larger health care system overhaul…a cause also supported by organized labor.

• Whole Foods released a results of a new Harris interactive survey that it commissioned showing that “two out of three (68 percent) U.S. adults have changed their cooking and eating habits because of the current state of the economy, with about half (51 percent) eating dinner at home more often and more than a third (37 percent) budgeting food shopping trips more strictly.

“At the same time, the survey found that the majority (76 percent) say they do not want to compromise on the quality of the food they buy, regardless of current food prices. While three in four (75 percent) also continue to purchase natural and/or organic foods in the same quantities as they always have, nearly two-thirds (65 percent) of consumers surveyed say they would like to find ways to be able to buy these foods within their budget.”

• The Wall Street Journal reported that Walmart plans to stop handing out payroll checks to its employees, but rather will roll out a system that will transfer earnings to a MasterCard debit card if the employee does not want direct deposit to a checking account. According to the story, the move is expected to save more than 250,000 pounds of paper a year, plus significant costs in its payroll department.

• The Austin American-Statesman reported that Whole Foods CEO John Mackey is not interested in running for the US Senate seat being vacated by Republican Sen. Kay Bailey Hutchison as she runs for governor. Rumors are circulated about a possible Mackey candidacy after he stirred up a political hornet’s nest with a Wall Street Journal op-ed piece promoting his company’s approach to health care and decrying the Obama administration’s efforts.

• Publix Super Markets aid that it plans to open a 60,000 sq. ft. hybrid-organic supermarket in Naples, Florida, that will integrate elements from its GreenWise organic/natural foods format and its traditional store concept. The store is scheduled to open during the second half of 2010 and will be roughly 25 percent bigger than the typical Publix.

• The Puget Sound Business Journal reports that Starbucks plans to expand on its test of a new format that doesn’t carry its name or branded product, but does sell beer and wine. According to the story, Starbucks “plans to add a second coffee house in the style of the much-talked about 15th Avenue Coffee & Tea cafe that opened recently in Seattle’s Capitol Hill neighborhood. The new cafe will be called Roy Street Coffee & Tea and will open this fall, also in Capitol Hill, at 700 Broadway East.”

• The Patriot Ledger reports that Ahold-owned Stop & Shop and Giant Food are shuttering 43 Starbucks kiosks in their stores for not performing up to expectations – a decision that Ahold says will result in a $7 million impairment charge. The closings will leave 53 Starbucks kiosks in Stop & Shop and Giant stores.

• Costco said that its August sales were flat at $5.4 billion, on same-store sales that were off two percent. Fourth quarter sales were down three percent to $21.9 billion, on same-store sales that were down five percent. And, Costco’s annual sales fell two percent to $69.9 billion, on same-store sales that were down four percent.

Family Dollar Stores said that its fourth quarter net sales were up 2.6 percent to about $1.81 billion, on same-store sales that were up one percent.

Rite Aid said that its August sales fell 3.2 percent to $2.4 billion, on same-store sales that were off 1.9 percent. The company’s second quarter sales were down 2.7 percent to $6.3 billion, on same-store sales that were down 1.1 percent.

BJ’s Wholesale Club said that its August sales fell 1.9% to $757.6 million, on same-store sales that were down six percent.

Target Corp. said that August sales were up 0.1 percent to $4.86 billion, on same-store sales that were down 2.9 percent.

• Starbucks announced that it has named Michelle Gass, its executive vice president of marketing, to be the new president of its Seattle’s Best Coffee subsidiary.

At the same time, the company hired Annie Young-Scrivner, formerly the chief marketing officer for Quaker Foods, to replace Gass as its global chief marketing officer.
KC's View: