INDUSTRY CONSOLIDATION: SPARTAN BUYS VG'S

One of the last sizable family owned supermarket chains in Southeast Michigan is being bought by Spartan. This should allow them to better compete with larger rivals...

• Kroger
• Meijer
• Walmart

Spartan has been on an acquisition tear the past few years. Chains they have acquired include...

• VG's [Pending 2008/2009]
  
• Felpausch Food Centers [2007]
  
• D&W Food Centers [2006 Spartan Stores acquired D&W Food Centers adding 16 supermarkets to its retail base for a total of 68 stores.]

Spartan Stores: 'Very little will change' when Fenton-based VG's Food and Pharmacy comes under new ownership

FENTON -- A staple in the community and one of area's last independent family-owned chains, VG's Food & Pharmacy has been bought up by the Spartan Stores chain.

The move helps the hometown chain compete with supermarket bigwigs -- including Meijer and Wal-Mart stores that also have been expanding in Genesee County, said David J. Livingston, a supermarket industry analyst...

What are your thoughts on supermarket industry consolidation?

WSJ: "Study Suggests Fan Use Cuts SIDS Risk in Babies"

Questions

• Will fan sales increase in the coming days and weeks? Most stores have cut back on fan inventory already [Summer is over].
• Will they be able to respond quickly if demand increases rapidly?
• Will they make signs pointing to where fans are in the store?
• Will they just sent an email to department managers or will store managers work to drive sales of fans?
• What training and information will they provide fro front line employees?
  

Part of the Wall Street Journal article is excerpted below. Full article should be available by clicking on the headline for this post.

Using a fan while a baby is sleeping appears to significantly cut the risk of Sudden Infant Death Syndrome, or SIDS, according to new research.

Researchers at the Kaiser Permanente Division of Research in Oakland, Calif., compared 185 babies who died from SIDS in 11 California counties between May 1, 1997 and April 30, 2000, with 312 normal infants from similar socioeconomic and ethnic backgrounds living in the same counties. Mothers were asked several questions about fan use, pacifier use, room location, sleep surface, the type of covers over the baby, bedding under the infant, room temperature and whether a window was open.

TAKEAWAY: Stores with baby sections should use this new information as a communication opportunity. Deliver actionable and important information to consumers that will respond to it. There are so many lost selling opportunities, it makes zone/district/etc managers sick.

Department managers should consult with category managers on which fans are tops with parents with infants. This might be obvious already. Being proactive is important. Order top selling fans today so weekend sales do not lead to Out-Of-Stocks that kill profits and destroy customer satisfaction.

What are your thoughts on how businesses will/should respond to this new research?

MORE GOVERNMENT RED TAPE

Opinion: The government is creating more hoops for food service operators to jump through. It should be acceptable that calorie and nutrition information be available on a standard sheet of paper or in a digital kiosk. Some supermarkets and fuel centers have computer kiosks for placing orders. Have seen these at Wawa fuel stations and at Ukrop's supermarkets in Virginia. The nutrition information could be part of this system. Might cost big money to have the system upgraded. Just another additional cost of doing business thrust upon the business enterprise.

Washington News

U.S. Sens. Tom Carper (D-DE) and Lisa Murkowski (R-AK) introduced the Labeling Education and Nutrition Act, which would require restaurants and grocery stores that serve prepared foods and have 20 or more locations to disclose calories for each menu item. Under the bill, calories will be posted directly on the menu, menu board or in one of the approved alternative ways, such as a menu insert or a sign directly next to the menu board. Full Story

WSJ: "WALGREEN TOPS CVS OFFER FOR LONGS"

DRUG RETAIL WARS

The Wall Street Journal has an article about Walgreen made an offer for Longs Drug Stores. CVS has previously made an offer to buy the Longs Drug Store chain. This offer was accepted and the deal was nearly completed.

NEW YORK -- Walgreen Co. made an offer late Friday to buy Longs Drug Stores Corp. for $2.8 billion, hoping to unseat a rival offer from CVS Caremark Corp. that Longs had already accepted.

Walgreens said it would pay $75 a share in cash to buy the California-based Longs, besting CVS's price of $71.50 per share, ...

Takeaway
Walgreen made this offer to force CVS to pay a higher price. This may or may not happen. The cost of this move is limited for Walgreeen. The more money CVS pays the less they have for remodeling and competing.

CVS may have to match the $75 a share offer. There is little possibility that Walgreen actually thought their offer could, would or will go through.

This move is intended to slow their fiercest direct competitor. Both Walgreen and CVS are in a battle against Walmart, Target, COSTCO, Kroger etc.

CREDIT CRUNCH: BIG 3 DEALER CONSOLIDATION

The Wall Street Journal has an interesting story on how the Credit Crunch is squeezing car dealerships.

Tight Credit Puts Squeeze
On Big Three Auto Dealers
By JOHN D. STOLL
August 28, 2008

The credit crunch squeezing Detroit's Big Three auto makers is now spreading to some of their dealers, adding financial pressure to a group already strained by this year's big drop in auto sales.

Takeaway:

• The Big 3 are seeking to consolidate their dealer networks
  
• It will be costly to buy dealerships out
• The credit crunch will squeeze and consolidate car dealers
  
• Strategy and tactics are critical dealer survival
  
• No longer is size and scale a winning combination

This is a story to track closely for the next 6 months and out to 5 years from now. There will be tremendous change.

What are your thoughts?

CAREER OPPORTUNITY IN SKILLED TRADES

Interesting article in the Wall Street Journal this morning. There are some smart alternatives to college. Read the article and evaluate your situation. If you know someone who might benefit from reading it, pass it on.

A snippet of the column is below. The full article can be accessed at the link in the post title above or the article title below.

CAREERS

Contractors, Unions
Try Web, Schools;
A 'Dirty Jobs' Role

By ANTON TROIANOVSKI

Even as the economy slumps and unemployment rises, strong demand for power plants, oil refineries and export goods has many manufacturers and construction contractors scrambling to find enough skilled workers to plug current and future holes.

With the shortage of welders, pipe fitters and other high-demand workers likely to get worse as more of them reach retirement age, unions, construction contractors and other businesses are trying to figure out how to attract more young people to those fields.

Their challenge: overcoming the perception that blue-collar trades offer less status, money and chance for advancement than white-collar jobs, and that college is the best investment for everyone.

Takeaway:

• Choosing a path [Goal] and perusing it is important
• Being a price maker [skilled / talented] is better than being a price taker [unskilled / commodity]
• Aging of the work force is happening in most areas of the employment. Maybe even more so for skilled trades as there is probably a limit to how many people will work past 60, 62, 65 in blue collar career. Knowledge workers do not face the physical toll 40+ years of labor places on the body. They will work past retirement in some capacity. [consulting, part time, special projects etc]
• Skilled trades are valuable. There is a strong financial reward for people with the right skills / talent.
• College and university are not the only path to prosperity.
• The trade associations need to do a much better job communicating that their career opportunities are competitive with those being pushed by "Big Education."
• Dusty Henry has the right attitude and he will be successful [Step #1 Find a goal Step #2 pursue goal]

What are your thoughts?

THE US$

Interesting article on the US Dollar in the LA Times.

Resurgent dollar slams Americans' foreign stock holdings
The once-struggling U.S. dollar suddenly is the strongman of the world’s major currencies. That’s great for Americans’ purchasing power -- but if you’ve noticed, it’s a heavy blow to the foreign stock holdings in your portfolio.

Takeaway:
As the Dollar strengthens foreign holdings are reduced in value upon currency conversion. People/investors appear to be buying US Dollars to invest in safer US based investments.

As the Dollar becomes more in demand its value increases and commodities priced in Dollars become cheaper for people using the US$. This may be part of the reason oil has been dropping. The current price of NYMEX oil can be found on Bloomberg

Hostilities between Russia and the Republic of Georgia may halt or reverse the recent price drops if tensions further increase. Keep a close eye on the situation for signs of further escalation.