‘Round The Trade
We thought we might have heard some official word by now on the status of Farm Fresh, the beleaguered Virginia Beach chain owned by Supervalu. A meeting with associates that had been slated for February 27 was abruptly cancelled and has not yet been rescheduled. We think the delay is temporary and believe that, when all is said and done, Kroger/Harris Teeter will be the biggest winner in the potential selloff…I think we all know that there’s tremendous waste in our food assistance program and the last three presidential administrations have all trimmed the subsidies available to those economically unable to afford food. Fighting hunger remains one of our nation’s biggest challenges and President Trump’s proposed $17.2 billion cutback of SNAP benefits for 2019 represents a 22 percent reduction from last year’s budget allocation. The reduction, which is actually $200 million over 10 years, is not only cruel, it’s ridiculous to boot. Trump and his bobblehead buddy “Slip Him a Mickey” Mulvaney, the director of the Office of Management and Budget, have concocted a plan that would offer SNAP qualifiers a meal-kit of products that would be delivered directly to the homes of those who are eligible for food assistance. The program, called U.S. Harvest Boxes, would provide shelf-stable milk, juice, cereal, pasta, peanut butter, canned meat, canned fruit and canned vegetables which would all be American-grown and produced. Politically speaking, this is a presidential administration that can barely walk a straight line on any initiative. Politics aside, does anybody think a project as labor intensive and nuanced as this has any chance of being executed at a competent level? Sadly, this could be “I Love Lucy” meets “Monty Python.”…according to the Belgian newspaper De Standaard, current Ahold Delhaize CEO Dick Boer could retire as soon as later this month. The story noted that current deputy CEO Frans Muller will be elevated to the top job at the Dutch retailer. Boer would then become chairman of AD’s supervisory board replacing Mats Janssen, former Delhaize chairman. Ahold would not comment on the possible changing of the guard, but it makes sense given Dick Boer’s age (he’ll be 61 in August) and the fact that the integration of Ahold and Delhaize is now complete. It’s likely that a detailed succession plan was negotiated as part of the merger of the two large European-based chains whose primary holdings are in the U.S. More Ahold Delhaize news: Peapod, the grocery delivery service unit of Ahold Delhaize USA, has opened a “wareroom” in North Coventry, PA in conjunction with its Giant/Martin’s banner that will allow it to serve 25 percent more customers in the Philadelphia area. This is the fourth Peapod “wareroom” to open in Pennsylvania and will bring an additional 120 jobs to the area…earlier this month, the Salvation Army opened is first non-profit grocery store in its history. The new store is called DMG Foods (Doing the Most Good) and is operating in a 7,000 square foot warehouse on East 29th Street in Baltimore. DMG Foods will provide fresh and affordable “healthy” food to about 1,200 families who live in that food desert area of northeast Baltimore. It will be working with the Maryland Food Bank (MFB) in offering daily meal solutions and cooking demos. BTW, I had an opportunity over the past month to meet new MFB CEO Carmen Del Guercio, who after many years in the banking business in Baltimore is now devoting his energy to improving the lives of many economically challenged Old Line residents. It’s been a few years since I’ve toured the MFB facility on Halethorpe Farms Road and I was very impressed by the improvements in the building and learned about some of the ambitious plans Del Guercio has to reduce hunger in Maryland…a tip of the hat to the National Grocers Association (NGA) on another strong annual convention in Las Vegas. I continue to be impressed by the improvement of its annual showcase every year. NGA is still small and nimble enough to provide its members (independents and regional chains) with a qualitative balance of larger forums, smaller breakout groups and an exhibitor showcase. Interestingly, just as the trade show was ending, NGA announced that it has sold an equity stake at its annual event to Clarion Events, a UK-based expo company. Next year’s show moves to a new city – San Diego – after being held in Sin City for many years. In other trade association news comes word that Pam Bailey, president and CEO of the Grocery Manufacturers Association (GMA), will be stepping down after a 10-year tour of duty leading the big group. In my opinion, Bailey did a good job leading the association up until about two years ago when the industry began changing rapidly and became more competitive, global and complex for many manufacturers. In the past year, large corporations such as Campbell’s, Tyson, Cargill, DowDupont, Unilever, Nestle, Dean Foods and Mars all dropped out with some of those suppliers citing conflicting views with the association over issues such as GMO labeling and overall transparency regarding ingredient and nutritional labeling…Kohl’s will soon begin a 10-unit test in which it will house Aldi stores within its four walls as part of continuing effort by the apparel merchant to build traffic and drive overall sales. Aldi will essentially rent space from the Menomonee Falls, WI retailer and independently operate its “store within a store.” If the beta test is successful, the concept could be expanded to an additional 200 stores later this year. Kohl’s has proven it is willing to experiment with other retailers’ products when it began selling Amazon products at about a dozen of its 1,150 department stores last fall…sorry to see Wall Street financial analysts continue to punish retailers if a small part of their measurable metrics doesn’t meet projections. Such was the case with Walmart, whose most recently completed fourth quarter was very good by all accounts, except to the desk jockeys who reside in lower Manhattan. The Behemoth’s stock price took a slight hit the day after the world’s largest retailer posted an e-commerce sales increase of “only” 23 percent compared to a 50 percent jump the previous quarter. However, CEO Doug McMillon saw the dip in online sales as temporary, stating: “We have good momentum in the business, with solid sales across Walmart U.S., Sam’s Club and International. We’re making real progress putting our unique assets to work to serve customers in all ways they want to shop…we’re making decisions to position the business for success and investing to win with customers and shareholders.” I agree with him – Walmart is clearly trending in the right direction and is investing heavily in its IT and digital infrastructure which will allow it to remain a powerful organization for many years. Walmart is also developing a technology called “Eden” which inspects produce for defects and can accurately predict the exact date when that item will spoil. Walmart believes it can save as much as $2 billion over the next five years. “Eden” is currently being used in 43 Walmart DCs and will shortly be brought to the retailer’s supplier farmers. Walmart has also entered the meal kit business with 10 different meal varieties available in about 250 stores. By the end of 2018, the meal kit offerings will be expanded to about 2,000 units. Prices of the prepared meals will be in the $8 to $10 range…just before presstime, Target said it would raise its minimum hourly wage to $12 by this spring, the first step of a broader, more long-term initiative that would ultimately boost the mass merchant’s minimum wage to $15 per hour by 2020… we have a few notable deaths to report this month. Vic Damone, 89, whose smooth baritone made him the king of all saloon singers – Frank Sinatra – to once state “he had the best pipes in the business” died earlier last month in Miami Beach, FL. Damone, who began singing professionally at the age of 14 in New York, recorded more than 2,500 songs. His biggest hits included “You’re Breaking My Heart” and “On The Street Where You Live.” Except for Tony Bennett, the crooners from the golden age of lounge singers, including Sinatra, Dean Martin, Perry Como, Jerry Vale and Mel Torme, have all died… the Reverend Dr. Billy Graham has left us to visit a higher authority. The charismatic North Carolina pastor whose evangelizing crusades took him to 185 countries where he preached to an estimated 215 million people, died last month at the age of 99. Graham began his ministry in 1939 and provided counsel and prayer to 13 presidents beginning with Harry S. Truman in the 1940s. Among his closest friends was Dr. Martin Luther King Jr., who once said of Graham: “Had it not been for the ministry of my good friend Dr. Billy Graham, my work in the civil rights movement would not have been as successful as it has been.”…and from the world of sports, we lost two unique personalities. Former Baltimore Oriole pitcher Sammy Stewart has died at the age of 63. Stewart was indeed a talented pitcher who was a key contributor to the O’s championship season of 1983, but what made his career memorable were both his on-the-field presence and his off-the-field problems. Known as the “Throwin’ Swannanoan,” (his hometown was Swannanoa, NC), Stewart set a major league record at the time by striking out seven straight batters in his 1978 major league debut. In the 1983 World Series against the Phillies, he pitched three times in relief and was not scored upon. After he retired in 1987, his life sadly spiraled out of control. He was arrested dozens of times as he dealt with addiction to crack cocaine. He pawned his championship ring, became homeless and spent more than six years in prison before being released in 2016. By that time, he had turned his life around and became re-associated with the Orioles’ alumni network. And for you old folks out there (including me), Roger Bannister has passed away at age 88. That would be Dr. Roger Bannister, who had a long and distinguished career in medicine. But, he was far better known for an achievement that many athletic observers thought to be impossible at the time. On a cool, wet and blustery English day in May 1954, Bannister ran four laps around a cindered track in his hometown of Oxford in 3:59.4, making him the first person to run a mile in under four minutes. Bannister’s record stood just 46 days and he retired from competitive running less than a year later to pursue his medical career. “I wouldn’t claim to have made any great discoveries, but at any rate, I satisfactorily inched forward in our knowledge of a particular aspect of medicine,” he said about his post-athletic career. “I am far more content with that than I am about any of the running I did earlier.” By the way, the current world record for the mile is now 3:43.13.