As I am writing this in late June, the first wave of Harris Teeter’s price impact plan is just being rolled out. By July 4, expect the media fireworks to begin and then the real impact to be felt. Like the price reduction plan unveiled in late April in its core Charlotte market, the upscale service-oriented merchant – which has grown more quickly than any other supermarket chain in the Baltimore-Washington market over the past decade – is about to address its one perceived weakness (high retails) with an aggressive new program. Backed by strong parent firm Kroger, HT now has the leverage and flexibility to work on areas that aim to strengthen the company’s infrastructure and ultimately grow market share. Like the Charlotte price impact initiative, Harris Teeter has reduced thousands of items which are supported by in-store signage and will shortly launch an aggressive radio and TV campaign promoting the plan. We’re told that the initial rollout will take 2-3 weeks to implement at store level before a formal announcement is made. The pricing initiative is already producing favorable results in Charlotte (and also in Asheville and Henderson, NC) and its impact could be huge in B-W where market leaders Giant/Landover and Safeway are not perceived as strong price operators and have fallen even further behind HT in service and perishables image. We’ll be out checking stores in early July and we’ll keep you posted about the upcoming battles. Corporately, parent firm Kroger continues to buzz along, seemingly immune from the other difficulties most of its supermarket rivals are experiencing on the top and bottom lines. In its recently completed first quarter ended May 24, the Cincinnati based supermarket juggernaut reported a 9.9 percent increase in total volume to $33 billion; ID sales (excluding fuel) improved by an impressive 4.6 percent. Kroger’s quarterly earnings reached $501 million, an increase of 1.5 percent from the same period a year ago. After posting these strong results, Kroger raised its net earnings guidance for the year to $3.19- $3.27 per share from a previous expectation range of $3.14-$3.25 and said it expected identical store revenue for the year to range between 3-4 percent for the year, up from 2.5-3.5 percent. During a conference call with financial analysts, Kroger officials noted that the sharp sales jump was an indication that shoppers were less cautious in their spending and more confident that the economy was recovering. “We are seeing strong positive indicators in shopping behavior,” CEO Rodney McMullen stated. “Our customers have exhibited less cautious spending behavior, for example. Consistent with the rise in consumer confidence index in May, our own customer research tells us that more customers perceive the economy to be in recovery. While it is obviously welcome news, the recovery remains fragile, especially for customers on a budget.” According to new COO Mike Ellis, Kroger’s acquisition of Harris Teeter is “going extremely well. We are spending time with Harris Teeter and learning a lot about how they connect with customers. Their store standards and fresh foods are world-class, and our cultures are a great fit, which makes our integration work rather easy.”…the news isn’t quite as rosy at Ahold USA, a chain that was once thought to be the leading contender to acquire Harris Teeter. The Zaandam, Netherlands- based international retailer posted operating income of $533.69 million in its first quarter ended April 20, down 6.2 percent and its U.S. ID sales remained slightly negative for the third consecutive period. Overall U.S. sales were down 0.3 percent (at constant exchange rates) and ID sales (excluding fuel) also dipped by 0.1 percent. Underlying operating margin declined from 4.1 percent to 3.9 percent. Dick Boer, Ahold’s CEO, told analysts in late May that Ahold will invest more aggressively in the quality and merchandising of its fresh assortment as well as in employee training while also focusing more sharply on price, under a program called “Project Thunder” which was first test-marketed last year and now has been rolled out at about 200 stores). “We are accelerating our plans for further rollout, increasing the intensity of the program in New England (Stop & Shop) specifically,” Boer noted in a conference call with financial analysts in Zaandam. By the end of this year, Ahold said it expects the program to be implemented in more than 50 percent of its stores, largely funded by the expected $250 million of cost savings in the U.S…if you’ve been reading this column from the beginning, you saw that I referenced an intra-company transaction involving Cerberus and its supermarket holding company, AB Acquisition LLC as it applies to the private equity firm’s pending purchase of Safeway for $9.4 billion. Here’s the skinny; Safeway’s Eastern division was assigned by Cerberus/AB Acquisition to be part of its Albertsons LLC unit. That unit currently includes the nearly 200 Albertsons stores that the PE firm acquired from Supervalu in 2006 as well as the Albertsons stores that were part of another SVU purchase in March 2013 (totaling about 630 Albertsons and United Supermarkets in the West) and the pending Safeway deal. At that time of the March 2013 deal with Supervalu, Cerberus/AB Acquisition also formed a new operating company called New Albertsons, Inc. (NAI) which is comprised of Jewel-Osco, Acme and Shaw’s (approximately 450 units). Now that Safeway’s Eastern division has been added to that unit, it makes for a more logical geographic alignment and also will help with NAI’s debt rating. The “swap” from Albertsons LLC to NAI is valued at $659 million for the 124 Safeway stores primarily located in the B-W market. Another Safeway tidbit: the chain will not be building its planned new store in the affluent Tenleytown section of Northwest Washington, DC (42nd & Davenport Streets). The reason isn’t budget cuts, but rather a budget enhancement. It seems that the posh GeorgetownDay School will acquire the property originally slated for the new Safeway to consolidate its campus. Actually, Georgetown Day will acquire both the Safeway parcel (the bigger plot) and the adjacent land which was the site of the former Martens Volvo car dealership for the whopping price of $40 million. That doesn’t sound like a low-margin deal to me at all. And while we’re still on the subject of Safeway, I was happy to see our old friend Rick Stein, former VP-merchandising for the chain’s Eastern division, at the recent FMI Connect show in Chicago where he was recently hired as VP-fresh foods for the large trade association. We wish him well in his new endeavor. As for the FMI Connect show itself, it was a major improvement from the large association’s last exhibitor show in 2012 in Dallas, which to be polite, “stank to high heaven” (no dead skunk puns intended). While there’s still lots of room for improvement, moving the show back to Chicago (where it will remain for the next three years) was a wise move and, although there was still a dearth of large CPG companies exhibiting, the vibe was a lot better, the education forum was improved and FMI’s affiliation with United Fresh (produce) proved to be a valuable partnership. Although I’ve heard some rather loud criticisms of the show, my advice is to be patient. It’s the first year of a new show era and FMI CEO Leslie Sarasin and her revamped team having been working hard over the past five years attempting to purge the previous inertia that was created by her predecessor. And remember it’s never going to be like the old “swingin’ soiree” of the 1980s and ‘90s, when the annual FMI Show was more like a three-day party than a meaningful trade meeting. One show that consistently “hits it on the screws” is the annual IDDBA convention, held in Denver this year. Celebrating its 50th anniversary this year, the IDDBA Dairy-Deli-Bake show has grown rapidly over the past decade due to its ability to bring in both established and new vendors in key perishables areas while also attracting important decision makers from both large chains and independent retailers nationally. IDDBA will always play well because it takes a targeted, focused approach in its planning and offers the kind of platform where interaction with important decision makers is expected…it’s with mixed feelings that I report the recent retirement of Russ Reynolds, area sales director for Supervalu’s Eastern region. Russell was certainly more than an area sales director – he was really the embodiment of what comprises a great employee. Extremely loyal, unbelievably hard-working, smart and off-the-chart funny, Russell spent more than 40 years in this business and, despite some significant health issues, never had a bad day. I’ve taken an oath of silence about some adventures we had when Russell was in the brokerage business – those stories are best delivered in an oak-paneled room with some barstools. Suffice it to say that, as a salesman, confidant and most importantly as a person – you can’t find anyone better than Senor Reynolds. I know you’re going to hate leaving the business you love, but I hope there’s nothing but enjoyment and good times ahead, my friend…it’s been a very tough month for deaths – the obituary column is much too full. First, I want to express my condolences to Supervalu Eastern region president Kevin Kemp and his wife Lori on the death of Kevin’s mother, Jeanne T. “Bettylu” Kemp, who passed away last month in Jasper, IN at the age of 78. Also passing on from the food business was Tyler Kohler, 87, former partner in the brokerage firm Kohler, Gore & Muchnick. What a genuinely nice man Tyler Kohler was. His southern gentleman’s charm, his sly wit and his neatly trimmed beard (one of the few guys sporting chin music in the 1970s) made him stand out in a crowd. Tyler retired in 1995 and he and his wife Betsy moved to their dream home in Vermont, where he died peacefully earlier this month. From the world of show business, among those who have left this good earth in the past month include Ann B. Davis, best known for her iconic role as housekeeper Alice Nelson on “The Brady Bunch,” who died at the age of 88. It is with sadness that I also report the death of Ruby Dee, 91, who along with her late husband Ossie Davis was not only a great actress, but someone who raised the visibility and stature of African American performers in a career that spanned an incredible 74 years. Casey Kasem, the internationally famous radio host and DJ who pioneered the weekly “American Top 40” show passed away at age 82. At least now, Kasem can find some peace after his wife Jean and his three adult children waged a battle over control of his health care that seemingly resulted in more legal wrangling than concern over Kasem’s well being. One of the most underrated jazz pianists and composers, Horace Silver, is dead at the age of 85. Known for his distinctive bop sound and creative arrangements, Silver had been a staple in the modern jazz scene since the early 1950s. Perhaps you never heard Silver’s work, but if you are familiar with Steely Dan’s 1974 hit “Rikki Don’t Lose That Number,” listen to Silver’s “Song for My Father.” You will quickly notice that either Donald Fagen or Walter Becker were paying homage to Silver or simply ripping off his riff. Sports dignitaries who died this past month include Tony Gwynn, the Hall of Fame outfielder who spent his entire 20 year career with the San Diego Padres. Gwynn had an unbelievable career batting average of .338 and won eight National League batting titles. Nobody in the history of the game could place the ball more expertly through the gap between the third baseman and shortstop (he called it the “5.5 hole”) than Gwynn, who also grew up in San Diego and was a basketball star at San Diego State. Sadly, Gwynn was only 54 years old. Chuck Noll, Hall of Fame coach of the Pittsburgh Steelers, is dead at the age of 82. When he was hired in 1969, Noll began the transformation of the Steelers, then one of the worst teams in the NFL, into the most feared franchise in the league, winning four Super Bowls in a six-year period (1974, 1975, 1978 and 1979). “Chuck Noll is the best thing that happened to the Rooneys since they got on the boat in Ireland to go to America,” said Art Rooney II, son of the team founder. Finally, we’ve lost the man who played alongside Jackie Robinson on the only Brooklyn Dodgers team to win the World Series, who coached Derek Jeter during the New York Yankees dynasty days of the late 1990’s and whose manager near the end of his career was Casey Stengel. Don Zimmer died earlier this month at the age of 83. “Zim” was truly one of the most beloved characters in the modern era of baseball and he spent the last 66 years of his life drawing a paycheck from the game he was enamored with. During his lengthy career he served as a player, a manager, a bench coach and an advisor. So devoted was Zimmer to the game of baseball that he and his wife “Soot,” were married at home plate during a minor league game in 1951…before I wrap this up, I want to extend thanks to our readers and advertisers, who have really helped make our signature issue successful once again. It’s been a challenging year for everybody in the grocery industry; competition has never been fiercer at every level – there are simply no more layups. So to all of our supporters, a tip of the hat for making this market study among the most successful in our 36-year history.