Wal-Mart's Food Fight

Wal-Mart's Food Fight
Melanie Lindner, 03.15.10, 11:55 AM EDT
Citi analyst upgrades retailer as price war with grocery chains looms.


Shares of Wal-Mart Stores got a boost Monday from Citi analyst Deborah Weinswig, who upgraded the stock on its recent grocery price cuts and management changes in its apparel division.

Weinswig lifted her rating on shares of the Bentonville, Ark.-based company to buy from hold, and raised her price target to $65, up from $54. According to the analyst, "Wal-Mart ( WMT - news - people ) is lacing up the gloves as it prepares to step back into the ring and win the modern-day price war in food retail." She estimates that the company currently controls 20.5% of the market, and could increase its share to 21.6% in this calendar year. For the long-term, Weinswig predicts that the company could take up to one-third of the domestic food retail market.

Wal-Mart picked up new cost-conscious customers through the Great Recession as they downgraded from traditional supermarkets, but as purse strings loosen from crisis levels those shoppers are showing signs of returning to chains like Kroger ( KR - news - people ) and Supervalu ( SVU - news - people )'s Shaw's and Shop 'n Save for a better customer experience.

According to Weinswig, Wal-Mart is working to improve its customer experience by widening grocery aisles through its "Clean Action Alley" initiative and aggressively reducing prices to remind customers it gained in the recession why they chose its stores.

In yet another effort to bolster sales, Wal-Mart has brought in eight new executives to its apparel team, which moved to New York City in late 2007 to be closer to emerging fashion trends. Weinswig says "lack of an aligned management team in apparel has resulted in significant disruption in Wal-Mart's apparent business over the past three years." However, she notes that the newly aligned management team and improvements in global sourcing could yield top-line growth as soon as the second half of 2010.

On news of the upgrade from Citi, shares of Wal-Mart gained $1.37, or 2.5%, to $55.27 in Monday morning trading.

Lindsey Graham says Obama needs to act on immigration

Lindsey Graham says Obama needs to act on immigration



If politicians are supposed to keep their friends close and their enemies closer, where should President Barack Obama keep U.S. Sen. Lindsey Graham?

Graham, a Seneca Republican, praises Obama some days; other days, like Sunday, he attacks.

Obama met with Graham last week and asked for help rounding up Republican support for immigration reform. Afterward, the president said his commitment to the issue was “unwavering.”

Sunday on ABC's This Week, Graham called that “just political spin” that “doesn't pass the smell test.”

“Unwavering is sending two cabinet members over to the House and Senate two hours a day for two months with dozens of Senators trying to write a bill, that's what President Bush did,” Graham said. “President Obama has not been unwavering on immigration reform. He's pretty much ignored it because he's been consumed by health care.”

Graham said it's time for the president to act, not talk about immigration reform.

“You do the heavy lifting,” he said. “You put together a comprehensive legislative reform package. You bring it to the Senate and House and see how many Democrat and Republican supporters you can get.

“All you've done is talk about what we should do. Now is the time to lead...See how many votes you can get.”

Healthful menus tax finances of schools

Healthful menus tax finances of schools

When the Sioux Falls School District cut back on french fries and cookies in 2005, the lost business from students was enough to throw a $2.5 million kitchen expansion project off schedule.

But habits changed and revenues bounced back. Today's high schoolers give little thought to soda-free vending machines and whole-grain tortillas.

With the upcoming reauthorization of the Child Nutrition Act, the Obama administration is looking to raise the quality of school meals nationwide. One-third of the nation's kids are overweight or obese, and more healthful school meals go hand-in-hand with first lady Michelle Obama's push for more exercise.

The Institute of Medicine, whose recommendations will shape the next school nutrition guidelines, has called for more fresh fruits, whole grains, dark green and bright orange vegetables and elimination of fatty milk, less sodium and caps on calories.

Anticipating the new rules, many South Dakota schools have spent the past few years making small changes in that direction. Shifting toward healthful foods, however, isn't cheap. And some wonder whether the government's reimbursement rates ever will catch up with the actual costs of feeding 30.5 million school children each day.

Current rules that qualify a school for federal meal money permit whole milk, make no distinction between fruits and vegetables and require no whole grains. That gives meal planners plenty of cheap options.

While some South Dakota school districts have had to use general fund dollars to cover losses, they've made it work.

"Now, as they're trying to up the bar with healthier foods, they're finding it more challenging," said Sandra Kangas, director of Child and Adult Nutrition Services for the South Dakota Department of Education.

It's been five years since Sioux Falls changed its nutrition guidelines for school meals and vending machines. Soda was removed from machines, lunch line cookies downsized and fries made available less frequently.

"It was kind of a painful push" toward more healthful choices, Washington High School Principal Jamie Nold said. "One of the hardest ones was the pop."


At lunchtime last Thursday at Washington, a group of four freshmen had no complaints about their options, which include lines for Mexican and Italian food, an American combo meal, a meal of the day and a sandwich and salad bar.

"If you don't like what the meal of the day is, you can always get a bagel or a sandwich," Nicole Grinager said.

Brady Daly takes no issue with adopting a more nutritious menu. His meal choice depends on which line is shortest. "It's usually all good, so I just do that," he said. "I guess we eat healthy stuff, but we don't notice it."

Joni Davis, the district's director of child nutrition services, is serving pancakes made from whole grains for the first time this year. Other additions are brown rice, black bean salsa and whole grain pasta. But with so much of every meal made elsewhere, schools are limited in the changes they can make. School cooks heat up Hot Pockets and chicken nuggets, but they don't decide what's in them.

Davis has seen some improvements from food suppliers, who are getting ready for the changes on the horizon. Chicken patties, for example, now come with a whole grain breading.

"The vendors are starting to see that the changes are very real," Davis said.
Huron, Winner meet criteria

The Huron and Winner school districts are the only ones in the state to have met the criteria for the HealthierUS School Challenge, a federal program recognizing schools that meet high standards for exercise and nutritious meals. It's expected the next nutrition guidelines will look much like those in the challenge.

Carol Tompkins, Huron's food service director, said the district bakes its own bread, a mix of whole and refined grains. Fruits and vegetables have been added, and the district buys manufactured whole grain items such as waffles. It has switched to a lower-fat breakfast sausage made from turkey.

Sioux Falls applied for the challenge but missed out because it didn't serve a bean or legume one week, Davis said.

Tompkins said a proposed maximum limit on calories could make meal preparation more difficult. She also wonders how she'll meet the demand for more low-fat entrees. "That's difficult unless you're doing an awful lot of scratch cooking," she said.


When the Sioux Falls School District cut back on french fries and cookies in 2005, the lost business from students was enough to throw a $2.5 million kitchen expansion project off schedule.

But habits changed and revenues bounced back. Today's high schoolers give little thought to soda-free vending machines and whole-grain tortillas.

With the upcoming reauthorization of the Child Nutrition Act, the Obama administration is looking to raise the quality of school meals nationwide. One-third of the nation's kids are overweight or obese, and more healthful school meals go hand-in-hand with first lady Michelle Obama's push for more exercise.

The Institute of Medicine, whose recommendations will shape the next school nutrition guidelines, has called for more fresh fruits, whole grains, dark green and bright orange vegetables and elimination of fatty milk, less sodium and caps on calories.

Anticipating the new rules, many South Dakota schools have spent the past few years making small changes in that direction. Shifting toward healthful foods, however, isn't cheap. And some wonder whether the government's reimbursement rates ever will catch up with the actual costs of feeding 30.5 million school children each day.

Current rules that qualify a school for federal meal money permit whole milk, make no distinction between fruits and vegetables and require no whole grains. That gives meal planners plenty of cheap options.

While some South Dakota school districts have had to use general fund dollars to cover losses, they've made it work.

"Now, as they're trying to up the bar with healthier foods, they're finding it more challenging," said Sandra Kangas, director of Child and Adult Nutrition Services for the South Dakota Department of Education.

It's been five years since Sioux Falls changed its nutrition guidelines for school meals and vending machines. Soda was removed from machines, lunch line cookies downsized and fries made available less frequently.

"It was kind of a painful push" toward more healthful choices, Washington High School Principal Jamie Nold said. "One of the hardest ones was the pop."

Senate approves school nutrition bill

Senate approves school nutrition bill

The Massachusetts Senate has approved a bill designed to ban the sale of high-calorie sodas and salty and sugary snacks in elementary and high schools.

The House passed a similar bill in January.

The Senate bill would require state health officials to develop nutritional standards for all food sold in public schools, including snacks and sodas sold in vending machines.

The bill would also require schools to sell fresh fruits and vegetables, ban deep fried foods and require students be taught about nutrition and exercise.

Supporters say the bill will fight childhood obesity. Critics say schools have made important strides in serving healthier foods and don’t need more state-mandated regulations.

Gov. Deval Patrick has indicated support for the bills.

Discount supermarket chain set for North Texas debut

Discount supermarket chain set for North Texas debut

by MojoPages
Local News

* Aldi Texas Web site

HURST — Aldi. You may not be familiar with the name, but this week, the international grocer is giving a big boost to the local economy.

Aldi is opening 11 stores across North Texas, and will add more than 30 additional locations between now and the fall — some of which are taking over space abandoned by other grocers. The company also built a distribution center in Denton to service its new stores.

It's bringing hundreds of new jobs to the region and creating a new shopping experience designed to stretch your grocery dollar.

"We continue to hire employees because we continue to look at our business here expanding," explained Aldi spokesman Scott Huska. "With opening 33 stores this year, we have a lot of opportunities for individuals to come on board."

Each Aldi store will hire up to 20 employees. Aldi's claim to fame is offering a limited selection of lower-priced items.

"You have the ability to save 25 percent on the grocery bill," Huska said.

One way the company saves money is by carrying only 1,400 popular items; competing supermarkets often stock more than 40,000 products.

"For instance, we may carry one brand of ketchup, which will be our select brand, and we would carry one size, which would be the most common in-purchase item in grocery arena," Huska explained.

You'll find a price comparison board at each Aldi store that shows national brand costs versus Aldi's brand.

We did some checking around on staple items: A dozen large Grade A eggs is $1.19 at Aldi; one quart of 100 percent pure Florida orange juice is $2.39.

"We are always looking to cut our expenses and doing everything as efficiently as possible," Huska said.

That means Aldi doesn't take credit cards or checks for grocery purchases; only cash, debit cards or Lone Star Cards are accepted to cut processing fees.

Aldi has plenty of competition — including Walmart, Tom Thumb, Kroger and Albertsons — all of which are already locked in a fierce competition for your shopping dollar.

In the early 1990s, the Food Lion chain came to North Texas with a concept similar to Aldi's: Lower prices and smaller stores with a limited product selection. Food Lion exited the market a few years later after failing to be competitive with established grocers.

New WA pipeline a symbol of new water policy

New WA pipeline a symbol of new water policy
The Associated Press

OTHELLO, Wash. -- The federal government is doing what until recently had been unthinkable for the Columbia River: building a new stretch of pipeline so more river water can be used for irrigation.

The small amount of water that initially will flow through the line near Othello won't solve the region's irrigation problems. But The Seattle Times reports that many growers see it as a critical first step for their farms' survival.

Others fear the pipe's large capacity means the state and federal governments are committing to huge new withdrawals from the river before the money has been found and the full environmental effects are known.

The $25 million, 1.7-mile pipeline in central Washington is possible because of a hard-fought compromise among lawmakers, farmers and some environmentalists. It will have the ability to carry large amounts of water from the Columbia, though such withdrawals are still being studied.

Farmers contend the river has plenty of water and taking more simply requires timing and creativity. The federal government and state plan to link the initial small diversion to new releases from Lake Roosevelt behind Grand Coulee Dam, which some environmental groups agree could help both farms and fish.

"The primary purpose of this is just to maintain what we have," said Mike Schwisow, an Olympia lobbyist who represents water users.

Others say that with a major aquifer in the area drying up and climate change and growth threatening to intensify water demand, it might be time to rethink what crops are grown in the region.

"I don't think they should spend public money on a pipeline to nowhere," said Rachael Paschal Osborn, director of the Center for Environmental Law and Policy in Spokane. "I think that a lot of farmers need to accept that they may have to revert to dryland farming."

Potatoes are a huge crop in the region - the state's No. 2 crop behind apples and a half-billion dollar a year business. Eastern Washington farmers grow a quarter of the nation's spuds, with most being processed into french fries.

If potatoes don't get enough water, they can turn out deformed and wind up rejected by processors.

Some farmers have switched to dryland wheat or low-water crops like canola, but the gross value of those crops can be 10 percent of what they can earn growing potatoes.

Thousands of farmers in the Columbia Basin get the bulk of their water from the river, but some still draw water from an aquifer that is declining in some places by dozens of feet a year. By one estimate, about 40 percent of wells are in serious decline.

Grand Coulee Dam, completed in 1942, was built not just for hydropower but as a massive irrigation project that aimed to irrigate 1 million acres of basin desert.

The Columbia Basin Irrigation Project was to be built in phases, but financial and environmental costs stalled construction in the 1980s. By then, more people had claims to Columbia River water than the river could supply.

Salmon advocates feared the river couldn't handle more withdrawals, but farmers argued water was getting to only about a third of the 1 million acres envisioned under the project.

Pressure built on Congress and the Legislature, and in 2006 a compromise was reached: The state and federal government would conserve water, but also get more out of the system, some for farms and some for fish, even if it meant building a new dam.

"The major players stopped fighting over whether or not water should be taken from the river and started to focus on developing new supplies," said Dan Haller, with the state Department of Ecology.

Gov. Chris Gregoire agreed to draw down Lake Roosevelt and release billions of gallons - one-third for fish, one-third as drinking water for growing cities, and one-third to flow in a trickle through a new pipe for farmers. This spring, contractors will build 9,000 feet of pipe in two sections to bring water to about 10,000 acres.

As a first step, "it's a fair compromise," said Michael Garrity, with the environmental group American Rivers. "But it doesn't say what the ideal amount of water or ideal combination of irrigated verses dryland agriculture is in that area."

Proposals to bring far more water to the region may be on the way.

"Some people have said you don't need a pipe that big, and the answer, of course, is 'absolutely not,'" said Jim Blanchard, who oversees parts of the project for the Bureau of Reclamation. "But you don't build two miles of little itty-bitty pipe just to get a little bit of water. When you build a facility out here, you build it to its next logical size."

Later this year, the Bureau of Reclamation plans to detail options for getting more Columbia River water to many more farmers. One option calls for drawing 10 times more water, enough to irrigate 102,000 acres and take farmers off declining wells.

Blanchard said that for such withdrawals to work without harming salmon, water would have to come from Lake Roosevelt or somewhere else in early winter when it's not needed, and be "stacked up someplace to be released later for crops."

That could involve building a new dam or reservoir.

Blanchard's agency is still evaluating the costs of the options, but he conceded each would be expensive. "There's no way to build anything cheaply anymore," he said.

Pa. farmers harvesting solutions for trucking woes

Pa. farmers harvesting solutions for trucking woes
Monday, March 15, 2010
By DOUGLAS B. BRILL
The Express-Times

On any given morning during harvest season, Bethlehem Township, Pa., farmer Dennis Koehler drives a truck from his farmhouse to a field and with a combine begins to collect crops.

Koehler fills the truck with corn, soy, wheat or barley in about 10 minutes just as a second farmer arrives in an empty truck. Dale A. Koehler Farms plucks food from its fields just like that -- empty truck in, full truck out every 10 minutes -- hours on end most harvest mornings.

But new rules proposed for farm trucks would tack a 10-minute vehicle safety inspection onto each 10-minute ride, meaning the Koehlers could work with clockwork precision yet have only half a clock.

"If you have two less hauls per day because you're filling out paperwork, that's two less hauls," said Koehler, who is the Lehigh Valley's representative to the Pennsylvania Farm Bureau. "You don't have time to fill out paperwork. You need to drive the truck."

The farm bureau says new regulations from the Pennsylvania Department of Transportation are likely to decrease farming productivity and could drive some farmers out of business.

Koehler and the bureau spent the past week lobbying in Washington, D.C., for exemptions from the new rules.

Up to $22 million at stake

The changes that would affect farmers come under Pennsylvania's motor carrier enforcement code. In a move to retain federal funding, PennDOT plans before the end of the month to align its code with that of the federal government.

Doing so would ensure Pennsylvania continues to receive at least $3.1 million per year that state police use to inspect commercial vehicles. Other estimates have put the funding between $8.7 million to as much as $22 million.

The rule change is aimed at commercial trucks such as 18-wheelers. But the federal motor carrier code, unlike Pennsylvania's, doesn't exempt farmers.