Thursday, July 22, 2004

Grocery shoppers: Pay by cash, check or finger scan?
Supermarket shoppers soon will encounter a wave of new store technology that will make the self-checkout station seem quaint. 

In the coming months, some of the nation's biggest chains will roll out biometric scanners, interactive kiosks and "smart" carts. They are designed to get customers to spend as much as possible and still speed their way out.
Grocery operators hope the big investments in technology will help them better withstand competition from big-box discounters that are making food a mainstay of their product mix.
Supervalu Inc. of Eden Prairie said it's close to testing a system that allows customers to pay for groceries by placing their finger on a scanner. Other chains such as Albertson's and Food Lion are rolling out "smart" shopping carts that allow people to price-scan groceries as they shop.
Those innovations will join kiosks that can take orders and offer product information.
Supermarkets traditionally have been incubators for retail technology. But experts say the furious pace of innovation reflects a sense of urgency by food retailers to confront big-box price-slashers.
"If you look at supermarkets today, they are scared of Wal-Mart," said Allan Couch, director of the food and drug industry markets for NCR Corp., a Dayton, Ohio-based manufacturer of kiosks and self-checkout stations. "They can't compete on price. So [they say,] 'What else can I do? How do I differentiate from Wal-Mart?' "
All this technology isn't cheap for retailers. Installing one self-service checkout lane can cost $20,000, plus maintenance costs, according to IHL Consulting Group in Franklin, Tenn. Kiosks range from $3,000 to $7,000 a machine.
But retailers say the investment is worth it. Technology isn't a magic bullet, especially if Wal-Mart, Target and others eventually decide to use me-too systems. But a little bit of geekyness can go a long way to winning customers, analysts say.
"Often, these new technologies provide a real spark to the shopping experience," said John Hauptman, vice president of Willard Bishop Consulting in Barrington, Ill. "It can be enough to tip the scales in favor of one store over another."
Beyond self-checkout
Supermarkets introduced self-checkout stations a few years ago to allow time-pressed shoppers to bypass long lines, especially if they had only a few items. Now companies are trying to extend that convenience beyond the checkout.
Last month, Supervalu installed self-order kiosks at deli departments throughout its Bigg's stores in Cincinnati and Clarksville, Ind. Customers can punch in a deli order at the kiosks and return within 15 minutes to pick it up, avoiding the wait at the counter.
It's no accident that the Cincinnati and Indiana stores got the kiosks. Wal-Mart is a major competitor in those cities, Supervalu executives say.
"We thought, 'What else can we do to differentiate ourselves, particularly from a Wal-Mart, and give us an advantage in service,' " said John Eversman, Supervalu's vice president of retail technology.”Areas like produce and deli are not Wal-Mart's strength, so why not take advantage of that?"
In the Twin Cities area, shoppers soon could find similar kiosks at Cub Foods stores. Lund Food Holdings Inc. of Edina, which operates Lunds and Byerly's stores, already offer the kiosks at the Ridgedale and Chanhassen stores and is considering adding more.
"We view the kiosks as another type of service," said Dennis McCoy, kiosk project manager for Lunds.
Food Lion and Stop & Shop are testing a version of a "smart cart" that allows people to scan and bag groceries as they walk through the store. Neither chain operates in Minnesota.
One system, made by Symbol Technologies Inc. of Holtsville, N.Y., works like this: consumers use a handheld device to keep a running total of their purchases. At the checkout, shoppers scan an "end of trip" bar code on their cart and the entire order is downloaded into the register without any of the items having to be removed from the cart.
The system is not perfect. A dishonest shopper could scan one product but place a more expensive item into the cart. Frank Riso, Symbol's director of retail industry marketing, said consumers must sign a code of conduct agreement before enrolling in the program. The retailer also will rescan orders randomly to make sure customers aren't cheating, he said.
With Cuesol and IBM's "Companion Cart," customers can enter their shopping lists into a Web site and then download the list onto a screen attached to their cart that maps the location of each product in the store. The device also highlights items on the list once the customer enters the right aisle.
Eversman of Supervalu said the company also is interested in the cart technology. One problem, though, is that those systems currently require retailers to have a loyalty card program to establish a customer's identity and track purchases. To "leapfrog" loyalty cards, Supervalu and Milwaukee-based Roundy's Inc., which operates the Rainbow Foods chain, are exploring a biometric-based checkout system developed by Pay By Touch.
No more cash, cards
Consumers can place their finger on a scanner, enter a code and access a credit card or a checking account previously submitted to the retailer, eliminating the need to carry cash or cards. Pay By Touch says the system doesn't store actual fingerprints but rather a series of "data points" unique to each finger.
Eversman declined to give a timetable but said the technology's introduction is "imminent." John Boyle, Roundy's group vice president of information technology, said the company will test Pay By Touch in Milwaukee next month and soon could introduce it to Rainbow customers. The company also is developing a portable handheld scanner that allows employees to check out customers when regular cashiers are too busy.
While all these devices help customers save time, other technology aims to keep shoppers in stores for as long as possible with a flood of product information and advertising.
At Lunds and Byerly's, shoppers can look up and print recipes from special kiosks. FarmFresh, an East Coast chain operated by Supervalu, recently installed EasyAnswers Touchscreen kiosks that offer information on health, nutrition, weight control and sports and fitness. The kiosks, made by Healthnotes Inc. of Portland, Ore., also offer safety information on potential interactions between supplements and frequently used prescription and over-the-counter drugs.
"It often encourages consumers to make corresponding purchases in that particular department," Hauptman of Willard Bishop said.
The technology also offers supermarkets a lucrative source of income from manufacturers who want to reach customers.
Shop 'n Save, a St. Louis-based division of Supervalu, now plays ads on 40-inch digital flat screens suspended from the ceilings of its stores.
Advertisers "want to catch a person's attention close to where their products are” said Ed Carter, senior buyer and ad manager for Shop 'n Save.
Eversman envisions transmitting promotions and messages to specific customers through carts, video screens, kiosks or checkout stations.
What's uncertain is how concerned people will be about the privacy issues implicit in biometrics and retailers knowing their shopping lists, or whether all the extra information will be welcomed or viewed as so much more noise by shoppers already overwhelmed by advertising.
"We try to strive for a happy balance," Eversman said. "We try to be careful. Technology for technology's sake can turn people off."
Source; by The Star
Write: by Thomas Lee, July 04

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Food industry seeks riches in diet niches
Revised nutrition labels also may join arsenal in fat fight
Savvy food manufacturers and restaurateurs could make a lot of money helping Americans battle the obesity epidemic, just as they profited by larding up consumers, food industry consultants say.
Leonard Teitelbaum, a Merrill Lynch food analyst, told the Institute of Food Technologists convention here this week that every 1 percent shift in what foods Americans buy represents a $1.5 billion market, and new product lines that appeal to lighter consumer tastes could be lucrative.
"That's enough to get anyone concerned and excited," Teitelbaum said, noting that Wall Street can punish the stocks of food manufacturers who don't keep up with what customers want.
He said stocks of bread and chocolate manufacturers currently are feeling the wrath of stock holders because of the impact low-carbohydrate diets are having on traditional bread and cookie producers.
"Obesity is a big deal," Teitelbaum said.
But some consultants said the Atkins diet is just a fad and destined soon to go the way of the Scarsdale and grapefruit diets. They predicted the next food fad will be healthy, lower-calorie foods and products that can be marketed as "good for you, better for you."
"You are going to see calorie consciousness back," John Stanton, a professor of food marketing at Saint Joseph's University in Philadelphia, told the annual convention of professional food scientists and industry representatives.
Stanton said he expects the Atkins fad to begin running out of steam in two years, replaced by a niche market for foods that are lower in fats, lower in added sugar and lower in calories.
"There are riches in niches," he said. "Obesity can mean fat profits."
Lester Crawford, acting commissioner of the U.S Food and Drug Administration, said his agency this year will propose the first revision in food labels in a decade, emphasizing the calorie content of foods. He said final decisions haven't been made, but he wants to make the type size larger and add information to the nutrition label.
Crawford said the government also is asking restaurants to come up with a way of telling consumers the nutritional content of the foods they serve.
"We're going to try voluntary, but if that doesn't work, we're going to come back to this," Crawford said, hinting that the government will consider mandatory regulations.
The industry adamantly opposes nutrition labeling, pointing out that consumers make so many changes in the way they want their food prepared that labeling would be difficult to implement properly.
Judith Stern of the American Obesity Association and a food nutrition professor at the University of California-Davis said the government's actions are much too timid.
"I am very discouraged about this," Stern said, contending that the government isn't doing enough to seriously address the problem of obesity in America.
"There's been a piddle response to obesity."
Stern said that government statistics show a startling increase in rates of obesity in the United States, with the number of teenagers classified as obese rising from 5 percent in 1985 to 16 percent in 2002, and a four-fold increase in the number of Americans more than 100 pounds overweight. More than 60 percent of American adults are obese or overweight.
Stern noted that U.S. Department of Agriculture statistics show that between 1985 and 2002, average daily calorie consumption rose to 2,680 from 2,220 calories. The government says the average daily caloric intake should be no more than 2,000 calories.
Stern said small reductions in the calorie content of restaurant food could have a major effect over time.
She criticized the industry for super-sizing portions to increase sales.
Over the last 50 years, the size of standard plates in restaurants has increased from 10 inches in diameter to 12 inches, and the content of muffins and bagels has doubled. She said cookbooks also have increased portion size, and some fast-food restaurants no longer offer soft drinks in small sizes.
"People should move more and eat less," said Robert Earl of the National Food Processors Association.
He said the food industry is being blamed even though most Americans eat a majority of food at home, and less than 5 percent of cooks are following government food serving guidelines.
Cathy Kapica, global director of nutrition at McDonald's restaurants, said her industry is responding to concerns over obesity by offering salads and low-cal Happy Meal choices of apple slices. In hopes of increasing sales of milk rather than soft drinks and juices, the restaurant is repackaging 1 percent low-fat milk into plastic jugs that Kapica said were designed to attract youngsters.
"Packaging is everything," Kapica said.
The company also is unveiling a new, slimmer Ronald McDonald and displaying the nutritional content of its products on tray liners.
Better labeling
The U.S. Food and Drug Administration is seeking the following, according to Lester Crawford, acting commissioner.
Food labels: The first revision in a decade will emphasize the calorie content of foods. In addition, Crawford wants to make the type size larger.
Restaurants: Crawford said the government wants restaurants to come up with a way of telling consumers the nutritional content of the foods they serve.
Source; Scripps Howard News Service
Write; by Lance Gay, July 04

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Whirlpool Posts 13% Q2 Profit Gain
Whirlpool Corp reported it earned $106 million for the quarter ended June 30, a 13% year-over-year increase.
Whirlpool's sales for the period hit $3.26 billion, a 9.2% gain over the $2.99 billion reported for the period last year.
Source; Whirlpool, July 04

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Shoppers and buyers will keep coming online, eMarketer projects
The number of online shoppers and buyers hasn’t reached its limit yet, projects eMarketer Inc. in its latest B2C E-Commerce in the U.S. report, just out. EMarketer projects that 74% of the Internet population over the age of 13 will shop online this year, up a tad from 73% last year and 7 percentage points from 2001. That equals 115.1 million consumers over 13, up from 82.3 million in 2001. In 2007, 77% of the online population over age 13 - 131.3 million people - will shop online, eMarketer projects.
61% of the online population over age 13 will buy online this year, up from 58.3% last year and 53.2% in 2001. That will equal 94.9 million buyers, up from 85.7 million last year and 65.3 million in 2001. EMarketer projects 67.4% of the online population over age 13 - 115 million people - will buy online in 2007.
EMarketer projects that online sales excluding auctions, travel and event tickets, will reach $72.5 billion, up from $56 billion last year. Sales will reach $121.1 billion in 2007.
Source; eMarketer, July 04

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IKEA Heads to Kiev
IKEA, the world's biggest home-furnishings retailer, plans to open its first store in Ukraine within a year to tap Eastern Europe's fastest-growing economy.
The store in Kiev will cost about 250 million euros ($310 million), construction will be completed in about a year, she said.
The Swedish company are prepared to open a total of two to three stores a year in Ukraine and Russia.
Write; by LuisB, July 04

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Gazprom Battles Costs
Gazprom, the world's largest natural gas producer, said Tuesday that it is forming a working group to cut expenses amid rising costs for pipes, transport and labor.
The group will be led by chief financial officer Andrei Kruglov, the company said in a statement.
Gazprom CEO Alexei Miller ordered the group to draft cost-cutting programs that will be reviewed by Gazprom's management and board.
Investment banks such as Moscow-based Renaissance Capital earlier this month urged Gazprom to cut spending, saying it suffers from "a cost overrun" and that management is showing "negligible zeal."
Gazprom last week said that its operating costs rose 19 percent to 593.4 billion rubles ($20 billion) in 2003, when reporting 2003 financial results based on international accounting standards.
Write; by LuisB, July 04

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Laurus first half sales down 10%
Laurus said today that first half sales are still under pressure. In the first half of 2004 total consumer sales by the Laurus formats came out at E2.1bin against E2.3bn. Like-for-like sales at Laurus are still under pressure. All stores have undergone a thorough face-lift and the prices of 5,000 products have been reduced by an average of 7%. Combined like-for-like consumer sales at Edah, Konmar and Super De Boer fell by 7.7% in the first half of 2004. Edah, Konmar and Super De Boer recorded net sales of E1.75bn. This is 11.6% lower than the net sales in the first half of 2003 which stood at E1.97bn.
Source; Laurus NV
Write; LuisB, July 04
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Sales of key retailers up 9,6% in June
Sales of the 100 key retailing enterprises in China went up 9.6% year on year in June to reach 11.1bn yuan, according to the China Commerce Federation. Food sales led the growth in the month, surging 46.2% to 1.22bn yuan. Sales of consumer electrical appliances slid, while that of high-tech commodities such as digital camera and video camera remained good. In June, sales of electrical appliances of the key enterprises stood at 1.22bn yuan, down 8.3% from the figure for the same period of last year. Garment sales, particularly summer style garments, increased steadily. The total garment sales in June hit 2bn yuan, up 14.7% year on year.
Source; CCF
Write; LuisB, July 04

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Christian Dior Couture Q2 Revenue Up 26%

Fashion house Christian Dior Couture has reported a second-quarter revenue rise of 26 per cent on the back of worldwide growth.
Dior, part of luxury goods group Christian Dior SA, said that between April and June revenue had risen to a record €138 million.
The company also said that operating profit had risen at a rapid rate, by over 30 per cent, in the first half of 2004.
Dior said that whilst its European markets had seen good growth, its markets in the US and Asia had been the most prosperous. The company highlighted John Galliano’s women’s collection and Hedi Slimane’s Dior Homme division as important influences on the company’s success
Source; Christian Dior SA
Write; LuisB, July 04

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Blockbuster testing online DVD rentals for Q4 launch
Blockbuster is testing a long-anticipated online DVD-rental service with a multi-channel twist: In addition to receiving mailed DVDs rented online at a starting price of $19.95 per month, subscribers also get e-coupons good for two in-store rentals at no extra charge. So instead of always waiting for the next mailed DVD, subscribers will be inclined to visit their local Blockbuster store where they may also purchase some candy or popcorn if not even rent an extra DVD or electronic game, Jerianne Thomas, director of marketing, tells “The e-coupons are a way we can differentiate from Netflix,” she says.
Blockbuster is also undercutting the retail pricing of Netflix, the recognized leader and pioneer of online DVD rentals and No. 30 in the Internet Retailer Top 300 Guide 
to online retailers. Blockbuster’s basic offering is an unlimited number of rentals per month, with up to three DVDs out at any one time, for a monthly fee of $19.95. Netflix recently raised its price for the same service by $2, to $21.95.
The price spread between the two companies widens with more expensive service plans. Blockbuster is charging $29.99 and $39.99 per month, respectively, for plans that allow up to five DVDs or up to eight DVDs out at the same time. Netflix charges $33.99 and $49.99 for the same service levels.
The Blockbuster service, which is expected to officially launch in the fourth quarter, became available last week at “The early response has been good,” Thomas says, noting that she was unable to say how many people were using it.
Blockbuster’s service is not offering the lowest price on the market, however. Wal-Mart Stores Inc.’s undercuts Blockbuster’s basic service price by more than $1, offering an unlimited number of DVD rentals per month with up to three out at the same time for $18.76.
Blockbuster hasn’t determined yet exactly how it will fulfill its online orders. But Thomas says it will consider fulfilling at least some orders out of its more than 6,000 retail stores in the U.S.
Source: IRM, July 04

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Will Italy attract new entrants?
Five major alliances currently account for some 84% of the Italian grocery retail market. While international participation in these alliances comes principally from French retailers (Carrefour, Auchan and Leclerc), the analysts believes there remains significant opportunity for further international retailers to invest in the market, which is one of the least consolidated in Western Europe.
Italian Market Share by Buying Group

Buying Group  Retailers                                                                     Market share (%)
Coop Italia                           Coop Italia, Sigma                                             20.1
Intermedia                           Auchan Gruppo Rinascente, Gruppo Pam, 
                                           Bennet, Sun, Gruppo Lombardini                        17.4
ESD Italia                             Esselunga, Selex, Agora                                     16.6
Carrefour Italia                    Carrefour, Finiper, Il Gigante, Algros, Cds,
                                           Disco Verde, Gdm                                             15.6
Mecades                               Inderdis, Sisa, Sintesi (DeSpar), Crai, Aligros       14.2
The high market concentration levels achieved by the leading alliances in Italy might suggest that the market is impenetrable for new entrants. This is not the case, however, as many alliances lack cohesion in terms of the formats operated, organisational culture, structure and strategy. There is therefore significant opportunity for these alliances to shift over time resulting in the creation of new partnerships between existing and/or new like-minded players.
Write; by LuisB, July 04

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Barbie's mid-life crisis
The world's Number One fashion doll is 44 years old this year.
But despite sales of over 1 billion Barbies worldwide, the American icon is facing some serious competition for her fashion doll crown.
In April, her makers Mattel saw their profits slump by 73% and this week announced that worldwide Barbie's gross sales are down 13%.
So who is stealing her thunder?
Real choice
Her main contender comes in the form of the Bratz dolls; Yasmin, Jade, Sasha, Cloe, Meygen, and Fianna are designed to be more streetwise and funky than Barbie.
Launched three years ago in the USA by Iranian immigrant Isaac Larian, over 80 million Bratz dolls have been sold worldwide.
In the UK, Bratz owns more than 30% of the fashion doll market and Bratz's UK distributor Nick Austin is confident that their share will grow.
"If you asked children a few years ago what they wanted it was always Barbie, Barbie, Barbie, but that was because there was no competition," he says.
"There was nothing else there and I think this is the first time that little girls have had a real choice on the doll shelves."
Just like me
But its not just Bratz who want a slice of the UK's £100m fashion doll market. Barbie's old rival Sindy is planning to re-launch.
Sindy originally came on the scene in the 1960s as a very British doll with a girl next door look. She triumphed amongst British girls in the 1980s but was trounced by Barbie in the 1990s.
Denise Deane, design and development director of Sindy points out that "it's a very competitive time to make a re-launch, but we're confident that we have something unique to offer and that Sindy will be a main player within the doll industry".
Twentyfirst Century Sindy looks very different from her 1980s incarnation. She is more flexible than ever before and her manufacturers plan to market her to girls as a doll who is "just like me".
Secure position
Mattel however is not taking any of this lying down. Barbie's target market is three years and upwards, while the Bratz dolls appeal to eight year old girls.
So Mattel have also brought out a much funkier range to appeal to this older age group; My Scene. Like traditional Barbie, this group of doll friends have a love of fashion but offer more accessories.
So far their strategy seems to be working; launched in 2002, their sales increased by 380% in 2003.
However, Barbie is still a bigger brand than My Scene and Barbie is clearly not ready to hang up her fashion doll crown just yet.
Despite the increased competition, Tim Kilpin, Mattel's senior vice president of girl's marketing, says her position is secure.
"We're very confident that we can continue to prevail and continue to be the number one girls brand in the world," he says.
Source; BBC Money Programme
Write; by Nicola Seare, July 04
Picture; Barbie is not ready to hang up her fashion doll crown.