Save-A-Lot files for IPO

Jan 7, 2016Jon Springer

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Save-A-Lot gets a 'street fighter' in Claus

Supervalu on Thursday informed shareholders and federal authorities of its intention to spin off its Save-A-Lot discount division to a publicly traded company that will be controlled by at least 80.1% by Supervalu shareholders.

“We believe that separating Save-A-Lot from Supervalu so that it can operate as an independent, publicly traded company is in the best interests of both Supervalu and Save-A-Lot,” Sam Duncan, CEO of the Minneapolis-based company, said in a letter to shareholders. “As two distinct publicly traded companies, each of Supervalu and Save-A-Lot will be better positioned to focus on its respective businesses, customers and strategic priorities and to capitalize on growth opportunities.”

Sam Duncan

Duncan raised the possibility of spinning off Save-A-Lot in July. Most recently the company hired a new CEO, Eric Claus, who has experience heading a public company. Claus officially began at Save-A-Lot on Monday.

“After the separation, Supervalu and Save-A-Lot will each strive to be an industry leader in terms of both products and services in their respective businesses,” Duncan added in his letter to shareholders. “We believe Supervalu will be able to focus on providing wholesale distribution services to independent retail customers and operating its five regionally based traditional-format grocery banners. Save-A-Lot will continue to be a leader in hard discount grocery retailing in the United States."

The prospectus said Save-A-Lot shares would trade on the New York Stock Exchange. The documents did not indicate a share price or a total proceeds anticipated in the deal or a date. Duncan said Supervalu stockholders would receive one share of Save-A-Lot common stock for every share of Supervalu common stock held by such stockholder on the record date.

As of Sept. 12, Save-A-Lot operated 441 corporate retail locations and provided wholesale distribution to 901 stores licensed to independent retailers, operating under the Save-A-Lot banner. Corporate stores accounted for approximately 43% of Save-A-Lot’s $4.6 billion in fiscal 2015 sales.

In a prospectus filed Thursday, Save-A-Lot said it is positioned to ride expansion of the limited assortment discount grocery format in the U.S. — a segment it said remains relatively underpenetrated and poised for additional growth.

“We believe the United States can support more than 3,500 Save-A-Lot stores under our existing store concept and layout,” the company said, noting that that number could expand. It plans to open approximately 90 stores per year in fiscal 2016 and fiscal 2017, and to maintain mid-to-high single digit rates of annual new store growth in future years.

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Citing Willard Bishop figures, Save-A-Lot said the limited assortment channel represented approximately 3% of the overall U.S. market and is projected for annual growth of 8% over the next five years. “Moreover, this channel remains less-established in the U.S. than in comparable developed economies, such as in Europe and Canada, where in 2014… discounter penetration of overall grocery market sales was 16%,” the company said, citing Planet Retail figures.

Save-A-Lot said its stores are differentiated as a result of high private brand penetration, a simplified, 3,000-SKU assortment, and emphasis on fresh food. The company said it would continue to operate licensed and corporate stores, but said corporate stores provided a superior vehicle for penetrating new markets including ongoing expansions in Las Vegas and Los Angeles.

Save-A-Lot said it had earnings of $84 million on sales of $4.6 billion during the 53-week 2015 fiscal year. Through 28 weeks of fiscal 2016 ending Sept. 28 of this year, Save-A-Lot posted $2.5 billion in sales and $44 million in net earnings.

"As an independent, publicly traded company, we believe we can more effectively focus on our growth and operating objectives and specific business characteristics, and thus bring more value to you as a stockholder than we could as an operating segment of Supervalu," Claus said.

Dollar Value of FSIs Increased 2.9% in 2015: Kantar Media

Top retailers dominate circulated pages

January 6, 2016, 02:45 pm

Free-Standing Inserts (FSIs) increased their dominance of coupon distribution last year, according to statistics compiled by Kantar Media. 

Consumers were offered more than $511 billion dollars in incentives through FSIs in 2015 – an increase of 2.9 percent compared to the previous year. The growth was driven by the 3.7 percent increase in Face Values.

“The FSI coupon space is becoming an increasingly more tactical world with manufacturers and retailers alike fine-tuning their strategies. There are fewer pages, but with more coupons per page, higher values and shorter expiration lengths. Manufacturers are limiting their financial exposure while still benefiting from the advertising impact of the FSI coupon,” said Lisa Ekstedt, director of custom solutions for Kantar.

Meanwhile, the country’s leading merchants dominated retail pages circulated. The top 10 retailers represented 80.8 percent share of the total retail promotion pages distributed. Four of the top 10 retailers increased FSI Pages Circulated in 2015. Walmart retained the top spot with a 33.4 percent decrease to 5.8 billion pages. Target continued to hold the second spot with a 25.2 percent decrease to 3.1 billion pages, and Walgreens maintained the third spot with a 38.4 percent decrease to 2.2 billion pages. Publix and Rite Aid both increased their participation to rank among top 10 in 2015.

Overall, retail pages distributed are down 24.9 percent with 351 manufacturers participating across 121 retailers in 2015

“Walmart’s focus on new and exclusive offers and Target’s focus on Cartwheel contributed to the decline in overall retailer pages circulated,” Ekstedt stated. “Other retailers like Dollar General and CVS increased their participation to capture a greater share of trips and coupon redemption.”

Nonfood categories distributed more than 195 billion coupons, up 2 percent versus a year ago, driven by the 6.9 percent increase in health care and 19.8 percent increase in other packaged goods (such as batteries, car care, markers, etc.) areas. Nonfood posted steady growth in coupons dropped with increases each year for the past four years. Nonfood categories increased the overall share of coupons dropped by 2 points to 69 percent in 2015.

Food categories distributed more than 89 billion coupons, a 6.1 percent decrease from last year, led by the 17.8 percent decline for the frozen foods area. The average number of coupons per page for CPG products increased for the first time in five years from 1.8 coupons per page to two.

“With higher priced items, Non-Food advertisers are able to run higher value coupon offers which are more likely to drive a retail trip and will more quickly increase the value of the shopper’s basket. FSI coupons provide a way of rewarding the consumer for engaging with their offer through high purchase incentive,” said Ekstedt.

She said FSI coupons continue to be an important part of the CPG manufacturer tool box. “With FSI coupons, advertisers are able to modify their strategy in many ways, including participating in retail promotion, aligning events with consumer pay periods and key holidays and leveraging higher face value offers to engage with consumers,” concluded Ekstedt.

Smarter than the average appliance: Samsung reveals 'Family Hub' fridge that orders food, plays films and even lets you see INSIDE IT remotely

• Fridge linked to online ordering services including Fresh Direct
• It has an 21.5inch HD LCD resolution touch screen built into its door
• Can control home appliances, display message and even email family 

By ELLIE ZOLFAGHARIFARD FOR DAILYMAIL.COM IN LAS VEGAS

PUBLISHED: 19:18 EST, 5 January 2016 | UPDATED: 04:53 EST, 6 January 2016

Your fridge could become the most important appliance in your home, if Samsung has its way.

The firm's 'Family Hub' refrigerator, unveiled today at CES in Las Vegas, will be able to help you do everything from message your family to virtually shop for food.

It was revealed alongside a host of new products, including a smart oven you can control with your phone and a range of SUHD TVs, which feature 10-Bit Quantum Dot displays.

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The firm's 'Family Hub' refrigerator, unveiled today at CES in Las Vegas, will be able to help you do everything from message your family to virtually shop for food.

WHAT CAN YOU DO ON SAMSUNG'S NEW FAMILY HUB FRIDGE?

- Three cameras let you check what is inside the fridge remotely. 

- You can stream music or films directly from your Samsung TV.

- If you're away, you can send messages to the Family Hub for others to see from your phone.

- You can post pictures, updates calendars and shop virtually for food.

- It also allows you to check whether other appliances in your home are on before you leave for work, such as lights in other rooms. 

The heart of the 'Family Hub' fridge is a 21.5 inch full HD LCD resolution screen located on the upper right exterior door.

The huge screen allows you to use your phone to post, calendars, pin photos, share kids' works of art, and leave notes.

One of the most impressive features is the addition of three cameras inside the fridge to capture an image every time the door closes.

You can then access those images anytime using your smartphone and take a peek inside your fridge.

'Even if you're at the store and forget to check on what you need for dinner that night, the Samsung Smart Home app can take a look inside your Family Hub fridge,' Samsung says. 

Users can also use the refrigerator to do an online shopping, as well as manage recipes and compile and share shopping lists.

To do this, Samsung has teamed up with Mastercard. 

Betty Devita, chief commercial officer of Mastercard, said; 'I've been testing this innovation in my home for a few weeks, and it's made me realise how connected we all are.' 
'At launch we will have access to online shopping at Freshdirect and Shop Right.'

But it's not just designed to be a smarter fridge. Samsung also wants the device to act as an entertainment hub.

It offers options for music streaming to play through its built-in speaker or connect to your Bluetooth wireless speakers.

You can also watch TV using something known as 'Screen mirroring' with your Samsung Smart TV.

It will be available this spring, although a price has yet to be announced.

'Samsung has strongly reinvigorated the home appliance space with fresh thinking and functionality that have taken appliances from a 'need' to a 'want,' said said John Herrington, Senior Vice President, General Manager of Home Appliances, Samsung Electronics America.

Samsung also unveiled a new range of smart ovens that allows you to use your phone to preheat and adjust oven cooking temperatures while you're out of the house.

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If you've left out a dirty sock, AddWash lets you add items after the wash has started. You can push a pause button and then add the missing item

Alongside this, it added something known as AddWash to its 2016 washing machine range.

If you've left out a dirty sock, AddWash lets you add items after the wash has started. You can push a pause button and then add the missing item.

It will be available this spring in three new models.

Samsung Electronics also unveiled two new additions to its Samsung Notebook 9 series for 2016 – a 15-inch and 13.3-inch laptop.

The New Samsung Notebook 9 series will be available in two colours, Iron Silver and Modern Pink, in select markets starting in early 2016. There are currently no plans to launch in the UK.

Samsung has also partnered with Microsoft to incorporate Windows 10 into its Galaxy Tab design.

'It will be the thinnest and lightest 2 and 1 tablet on the market today,' the company said. 'It is designed to move with you, and be carried around all day.'

Here's how Publix could fall prey to Walmart, Amazon and Kroger in 2016

Jan 5, 2016, 7:15am EST

Ashley Gurbal KritzerReporterTampa Bay Business Journal

Publix Super Markets Inc. is poised to capitalize on most of the top grocery trends of 2016 — but there's one key area where it could find itself playing catch-up to some of its toughest competitors.

Grocery analyst John Karolefski, Cleveland-based publisher of GroceryStories.com, has revealed his top industry trends for the year. Expect to see more entertaining in stores — think wine tastings, cooking demonstrations and food samples — along with more cafes where customers can eat in the stores.

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Publix Super Markets Inc.'s GreenWise store in South Tampa

NOLA LALEYE

Publix already uses its Aprons brand — which encompasses its cooking schools, Simple Meals program, recipe development and event planning services — as a way to engage customers, especially millennials, in some of its stores. Seventy of its more than 1,100 stores have specialty cheese shops, where customers can sample cheese and learn the stories behind each variety.

But online shopping and digital engagement will be huge in 2016, Karolefski said — and that's where Publix may lag some of its competitors."The two big elephants in the room are Amazon and Walmart, both of whom are testing online grocery shopping," Karolefski said in a phone interview Monday. "Both have the resources, infrastructure and the national footprint to dominate online grocery shopping if they want to. Should they do that, it will threaten every grocer in the country, and all of them are going to test online grocery shopping."

Amazon.com (NASDAQ: AMZN) and Walmart Stores Inc. (NYSE: WMT) are particularly big potential threats to Publix in its hometown of Central Florida. Amazon has two 1 million-square-foot warehouses here, in Lakeland and Ruskin. After Publix, Walmart controls the majority of grocery market share in Central Florida. It also has a grocery distribution center in Winter Haven and is under construction on a 2 million-square-foot e-commerce fulfillment center in Winter Haven.

In October, Walmart rolled out online grocery ordering at a select number of stores in Tampa.

Publix was a pioneer of online grocery shopping, testing the concept in the late 1990s. While it failed to be as profitable as the company would have liked, Publix President Todd Jones has said the idea is " always looking" at the service.

The Lakeland-based grocer in recent years has rolled out some online ordering options for bakery cakes and deli items. It's also offered digital coupons for years.

But one of its biggest competitors, Cincinnati-based Kroger Co. (NYSE: KR), is going well beyond online ordering in some of its stores. Kroger is one of Publix's biggest competitors, in metro Atlanta and the Carolinas.

Kroger has a service called Scan Bag Go, in which customers use a handheld device to scan their items as they shop. The device tallies up the customer's total, instead of having a cashier scan each item. Launched in a handful of stores in 2011, Kroger expanded Scan Bag Go in greater Cincinnati in November 2015.

While Publix tops several consumer survey reports nationwide, Karolefski said, 2016 may be the year it puts more of an emphasis on technology.

"If its competitors get big on this and it gains favor with consumers, they may have to," he said.

Around the country, organic farmers are pushing for ‘GE-free’ zones

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By Chelsea Harvey January 4 at 6:58 AM  

Wheat grows in a test field at Oregon State University (OSU) in Corvallis, Oregon, U.S., Friday, June 7, 2013. Photographer: Natalie Behring/Bloomberg

Jackson County, Oregon, has just joined the small but growing ranks of “GE-free zones” in the U.S.,  which prohibit the cultivation of genetically engineered (GE) crops. It’s at least the eighth county in the country to create such an ordinance, and efforts are springing up to pass similar measures in other places.

The Jackson County designation was made final on Dec. 22, when a federal judge approved a consent decree protecting the zone. The ordinance was originally passed in May 2014 by the voters of Jackson County, but was challenged in court by two GE alfalfa farmers, who argued that it violated Oregon state law. The challenge was rejected by a federal judge in May, and a court-approved settlement — which upholds the GE-free zone, but allows the alfalfa farmers to keep their crop for the remainder of its useful life — was finally approved in December.

There are many different types of genetically modified plants and animals, although GM crops are frequently modified to make them less susceptible to pests. Genetic engineering — especially as it relates to the food system — remains a hot-button issue in the U.S., with a primary concern among members of the public being the safety of GE products in terms of their impacts on public health and the environment. A growing movement has devoted itself to passing GE-labeling laws, for instance, which would identify products containing genetically modified organisms. 

But when it comes to GE-free farming zones, the concern is largely an economic one. The goal of creating the zones, according to proponents, is to protect non-GE crops from contamination with modified product — a risk they argue has become a threat to the livelihood of traditional and organic farmers.

Transgenic contamination is “the mixing of unwanted, unintentional GE content with traditional and/or organic crops or wild plants,” according to George Kimbrell, senior attorney at the Center for Food Safety, an environmental advocacy group promoting organic and sustainable agriculture, and counsel in the Jackson County case. When GE crops are cultivated in close proximity to non-GE crops, bees and other pollinators can carry pollen between the two, spreading the genes from the genetically modified plants.

This is a concern on several levels — first, because of federal patent laws protecting the right to produce and sell certain genetically modified organisms, said Elise Higley, a Jackson County-based farmer and executive director of the Our Family Farms Coalition, an advocacy group for traditional farming which helped spearhead the Jackson County ordinance. “It is definitely a risk in that you’re not able to legally save and sell your seed if it has any kind of contamination because of federal patent law,” she said.

Beyond the legal considerations, there’s also worry about having contaminated products rejected by domestic organic markets, which advertise their wares as being GE-free, Higley said. And the ability to export to the international market is another consideration as well, according to Kimbrell.

“A lot of our export markets…have a very different view of GE crops than the U.S. government does, and they require labeling, they have restrictions, they haven’t approved a number of GE crops that we have approved,” Kimbrell said. “Time and time again, U.S. farmers have lost literally billions of dollars through these contamination incidents.”

In 2014, China rejected corn shipments from the U.S. because they contained a banned variety of genetically modified corn produced by Syngenta, an event that experts estimated cost the U.S. agriculture industry nearly $3 billion. To be clear, these losses were not necessarily the result of contamination in the field via pollination, but rather the fact that the shipments themselves included the GE corn variety. However, the incident illustrates the often severe stances of other countries on the shipment and sale of genetically modified organisms.

There are also some precedents for monetary losses as a result of contamination in the field. A 2008 report from the International Federation of Organic Agriculture Movements noted that contamination via cross-pollination has resulted in losses for organic farmers in Europe, Canada, the U.S., Korea, Brazil and elsewhere and suggested that “GM contamination can give rise to a wide range of economic impacts beyond those related to legal tolerance standards. These include lost markets, lost sales, lower prices, negative publicity, withdrawal of organic certification and product recalls.”

In general, however, there have been few large-scale studies of economic losses due to this type of contamination, said Jennifer Kuzma, professor and director of the Genetic Engineering and Society Center at North Carolina State University. She pointed to one survey conducted by the Food and Water Watch, which found that a third of respondents had experience with contamination and about half of these had been rejected by buyers as a result. However, she noted that the sample size was fairly small, including only 268 responses.

But the concerns about coexistence between GE and non-GE farmers are a growing issue, she added.

“I think it’s a serious issue, and a lot of ethical questions come up about who reaps the benefits and who bears the cost of insuring a lack of contamination,” Kuzma said. “We’ve heard arguments on both sides, with organic farmers saying that they’re largely responsible for creating these buffer zones. Sometimes they’ll delay planting so the crops don’t pollinate at the same time as a GM farmer’s crops do.”

“It seems to me that most of the economic burden right now is on the organic or non-GM producers, and so then one has to ask the question: Is that fair or equitable?” she added. The issue can be argued from both sides, she said.

This is where the GE-free zones come into play, Kimbrell said. As there’s currently no national guidance on the separation or coexistence of GE and non-GE agricultural zones, individual localities, such as Jackson County, have started taking matters into their own hands.

“Until we have those restrictions on a federal level, until we have liability on the patent holder for contamination, then we need these zones in order to have any alternative to the current dominant paradigm of the GE crop systems,” Kimbrell said.

In addition to Jackson County, five counties in California, and at least one in Washington, Hawaii and another in Oregon, have enacted similar ordinances, and more may be on the way. Costilla County in Colorado, for instance, is currently pushing for a GE-free zone, although the ordinance has not yet been enacted.

But such regulations are not likely to occur uncontested. Shortly after the Jackson County ordinance received enough signatures for the ballot, for instance, the state of Oregon passed an emergency bill barring any other counties from regulating GE agriculture.

The issue remains a knotty one on the scientific side as well. Scientists have largely concluded that genetically modified organisms are safe for human consumption and frequently benefit the environment, although many members of the public remain skeptical and continue to push for more transparent GMO labeling.

The added economic concerns for farmers who wish to keep their crops GE-free is just another facet in an already thorny and ongoing debate. And the issue is not likely to become simpler anytime soon.

“I think these issues are only going to grow in intensity as organic or non-GM foods become more and more popular,” Kuzma said. “I think we’re going to see more of these food labeling bills and GE-free zones popping up, and I think it’s time we had kind of a national, more public conversation about how we want to approach genetic engineering from a societal context, and to have more open and transparent discussion about the issue in which many types of people can participate.”

World’s Largest McDonald’s Shuts to Make Way for Even Larger McDonald’s

• Daniel White @danielatlarge
 

Jan. 1, 2016

    

The new location will add 7,000 square feet

The biggest McDonald’s in the world closed this week to make room for an even larger McDonald’s.

McDonald’s shut down the 12,000-square-foot location in Orlando, Fla. in order to open a 19,000-square-foot version of the fast-food restaurant next door in February, the Orlando Sentinel reports. The franchise opened in 1976 and has since become a popular tourist attraction, but McDonald’s decided it was time for a renovation.

The old restaurant was famously shaped like a box of french fries and didn’t just have a PlayPlace but also featured an arcade, animatronic robots, bowling and more. McDonald’s hasn’t given word yet on what attractions the new location will offer, but there will be self-serve kiosks, allowing customers to order their own food.

Here are some pictures of the construction taking place at the new location:

What’s cooking at Hannaford? Food prepared to lure shoppers

The supermarket chain tests expanded takeout or eat-in options at its Forest Avenue store in Portland.

BY EDWARD D. MURPHY STAFF 

It’s not unusual that Matt Drost heads to the Forest Avenue Hannaford store for food.

But what he gets there isn’t the usual bag of groceries to take home. Instead, its freshly stir-fried vegetables and meat, noodle bowls or hot wings – lunch takeout for Drost, who works at the nearby offices for Avesta, the housing agency.

Heather Howell and Sadiq Majeed pick up hot wings for lunch in the takeout section of the Hannaford supermarket near Back Cove in Portland. Also available are sandwiches, quesadillas, hamburgers, pizza, burritos, sushi and salads. Gordon Chibroski/Staff Photographer

Customers select prepared food at the Forest Avenue Hannaford, where there’s also a seating area and coffee bar. Gordon Chibroski/Staff Photographer

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“It’s really neat,” Drost said of the store’s expanded takeout area, which also offers fresh sandwiches, quesadillas, hamburgers, pizza, burritos, sushi and salads, among other items.

The expanded section, which also includes a small seating area and coffee bar, opened Dec. 12 as part of a pilot program, said Eric Blom, a Hannaford spokesman. It is also being tried at a handful of Hannaford stores in New Hampshire and New York, and the company’s North Berwick store just began offering an expanded takeout pizza menu, he said.

“It’s something we’re exploring to bring our food expertise to customers in another way,” Blom said.

The early results are positive, he said, but it’s much too early in the process to determine if the concept will be rolled out in other stores. The Portland location was chosen, in part, because the store is the largest in the chain and had room to carve out substantial floor space devoted to takeout food. Smaller stores might not have much space to expand the takeout selections they offer, Blom said.

Hannaford is one of the larger chains to offer takeout food or a place for customers to eat in-store, but it isn’t the first. Whole Foods has an extensive prepared-food section and its Portland store has a small restaurant space, and the larger Market Basket stores – including its Biddeford location – have cafes where shoppers can sit, eat and ponder their shopping lists.

Supermarkets are looking for new things to draw in customers because it’s an industry with notoriously razor-thin profit margins.

Sales at traditional grocery stores, adjusted for inflation, shrunk or barely grew during the recession, according to the U.S. Department of Agriculture. And traditional supermarkets are losing customers to new entrants in the category, including Wal-Mart and Target stores, while food stores such as Whole Foods and Trader Joe’s are skimming off top-end customers.

The USDA said the share of the grocery market captured by nontraditional food stores grew from 13.7 percent in 2000 to 21.5 percent in 2011. During that same period, sales at retail supercenters and club stores doubled and, in the past few years, even dollar stores and drugstores have expanded their food offerings to try to carve out a piece of the market.

Many supermarket chains have decided that offering prepared food for takeout offers a way to win back some of those customers. The USDA said selling prepared and made-to-order food in supermarkets has grown at about 4 percent annually this decade, compared with about 2 percent annually for other grocery products.

Blom said Hannaford sees the expanded offerings as a way to help grocery shopping fit better into busy lifestyles. A parent who stops in a Hannaford store after work is likely to welcome the opportunity to take home a ready-to-eat meal as well as a few days’ worth of groceries, he said.

Many of the customers at the Forest Avenue store said the takeout offerings have quickly become favorites. Heather Howell and Sadiq Majeed, for instance, eagerly picked out spicy hot wings and put them into takeout containers for lunch.

The Portland residents said they don’t shop at the Hannaford location for groceries, but they like to get some meals there.

“It’s pretty good, and different,” Howell said.

Natasha Worrey, a line cook in the prepared-foods section, said the stir-fry bar is popular with customers and she’s happy that most of the food is cooked with fresh ingredients stocked by the store. For instance, the hamburgers are made with ground beef from the meat department, rather than frozen patties.

Kathleen Stokes of Portland and Carol Schreck of Cape Elizabeth said the coffee bar was a welcome sight when a recent planned walk around Back Cove was scrapped by bad weather.

“I’m a Coffee By Design kind of person, but this is just more convenient today,” Stokes said.

But at least one customer wasn’t happy.

Prudence Jones of Portland considered, but ultimately rejected, taking home a roasted chicken.

“I don’t deal with prepared foods often,” Jones said, adding, “I don’t like change in general.”