Netnotes

Bitter pill It's becoming a pill to operate an online pharmacy in New Jersey. The state's attorney general is suing two online firms–RB Drugstore and RX Leader–for peddling drugs such as Viagra and Phentermine to people with "no meaningful medical screening." The lawsuits come after an eight-month probe by the Division of Consumer Affairs' E-Commerce Investigative Unit where investigators posed as underage girls to buy the diet drug Phentermine, and used a phony doctor's name to order Viagra. The state will not pursue criminal charges, but is seeking to have the Web sites cease doing business in New Jersey and to impose fines of $7,500 to $15,000 per offense.



Online independentsIt just got easier for independents to offer online home shopping programs now that Supervalu has teamed with Independent Delivery Services Inc. (IDS) to manage online shopping services for retailers in its Northwest, Northern and New England regions. When using the service, consumers enter their supermarket's Web site, choose groceries from the store's complete item offering, select to either pay by credit card, cash or check, and decide when they want to pick up their order at the store. The cost starts at $4.99 for small orders and reduces to no charge for larger orders.

Cooks who surf

A recent "E-Consumer Report" by Unilever found that women who regularly surf the Net view it as a primary source for recipes, food information and nutrition guidance. They ranked the Internet right behind magazines and friends or relatives as the best place to get recipes. However, half of the respondents said they wish Web sites made it easier to find specific food-related data.

Go2 Coke

Finding which supermarket deli department offers Coca-Cola fountain drinks is as easy as picking up your cell phone, now that Coca-Cola has teamed with go2 Systems to offer basic go2 services to its foodservice customers. The partnership will offer brand-specific go2 Web sites, location database management, store locators, premium listings and the distribution of real-time information in go2's wireless and online location-based directories and affiliates. It is estimated the number of U.S. mobile Internet subscribers will balloon to 60 million users by 2003.



Net managers

Supermarket managers can open additional checkout lanes from the comfort of their homes, now that Apigent Solutions is offering its Web-enabled ZEOM.net service, which was previously only available to restaurants. ZEOM.net offers corporate, field and site managers tactical information to make operational decisions, and alerts them to problems such as overstaffing, excessive wait times in checkout lanes, and too much cash in the register. The managers receive alerts when operating standards are violated via their computer or any wireless device, including mobile phones, pagers and Palm Pilots.



Hot sites

Retailers targeting Hispanic women should check out www.soloella.com, a bilingual Web site for Latinas. Chat rooms, quizzes, horoscopes, poetry reviews and an advice column are included in the site, along with links to community organizations serving Latinas.

Busy supermarket execs no longer have to run downstairs to the deli department to get a bite to eat, but can order lunch at their computer from www.sandwichdirect.com. Users of the site, currently operating in San Francisco and Australia, can create a sandwich to their specifications–such as char-grilled sweet chili chicken, avocado, grated carrot, fresh cucumber and snow pea sprouts on a French baguette–then sit back and wait for the free delivery to their office.



REAL ESTATE



Lots of leases

The bankruptcy and liquidation of the venerable Bradlees and Montgomery Ward chains are flooding the real estate market with large store sites suitable for supercenters and supermarkets. Bradlees' 105 stores, located in the Northeast, average 70,000 square feet and are, with few exceptions, single-level locations. Many New England units share shopping center space with Stop & Shop, the discounter's former parent, fueling speculation that Stop & Shop may move next door and expand its stores into supercenters. "The Bradlees stores would be good locations for supermarkets," says Gary Lind, president, Lind Design, a College Point, N.Y.-based store design firm. Many of Ward's newer locations are in strip mall "power centers" that could easily be subdivided for supermarkets. According to a published report, Ward owns about 100 of its stores, and will sell those buildings, while giving up leases on its other 152 locations. Ward is paying only $1 or $2 and at most $4 per square foot for its space, but landlords will likely jack up the rent for new tenants considerably.

FINANCIAL



Mergers down

Supermarket merger activity was down 40% in 2000 compared with 1999, with 500 stores involved in transactions, compared with nearly 3,000 in 1998, according to an Arthur Andersen study. Transactions have slowed because of several factors, including a tightening of the debt market, 20% drop in the value of supermarket stocks, increased FTC scrutiny, and more store closures and bankruptcies. Although a few mega mergers may still be in the offing, Arthur Andersen predicts that "fill-in" consolidations of 10- to 50-store chains will be the trend for the next few years. It is also expected that some large regional chains will merge with similar competitors or sell to one of the five mega chains. Checking out savings Ahold has introduced a consumer savings account in its Dutch Albert Heijn stores that lets consumers earn interest while shopping. Consumers can add bottle deposits to their accounts and round up their shopping bills by 5, 10 or 15% and have the "extra" deposited in their account. Customers can also transfer money from their bank account to the Albert Heijn account. Shoppers can already indirectly own Ahold stock through the popular Customer Fund, and Albert Heijn plans to add other financial services in the future.

ALTERNATIVE FORMATS



The sol also risesProcter & Gamble is opening its first retail store. But don't expect to see Tide, Jif or Ivory on the shelves. Instead, its Culinary Sol specialty store will be more like a Williams-Sonoma with a cooking school, amphitheater, and retail boutique featuring Culinary Sol private label rubs and spices, elixirs, sauce and stock starters, blended oils and vinegars. The store was scheduled to open Jan. 20 at Rookwood Commons, an upscale mall in Norwood, Ohio, near P&G's Cincinnati headquarters. The store's interactive kitchen accommodates up to 24 aspiring chefs with sinks and prep areas, electric cooktops, ovens, and warming drawers, along with an interactive dining area where students can taste each other's cooking. Classes and lectures are taught from the 40-seat amphitheater, which is built around a sunken kitchen. The kitchens and amphitheater will allow P&G to gather consumer feedback from its students and help it develop new mainstream products. P&G is also reportedly testing kiosks in malls as a way to test new products. Additional information about Culinary Sol can be found at www.culinarysol.com.



E-Z gas



McDonald's is testing a new payment system in several Midwestern restaurants that allows customers to pay for their meals by simply swiping their Mobil Speedpass card at the register or drive-thru window, according to a televised news report. Modeled after E-Z Pass car toll systems, consumers swipe a card on their key chains at the register after receiving their meals. The cost of the meal is deducted from their bank debit account or charged to their credit card. If the system is effective, it may be rolled out to other McDonald's or other retail concepts, including supermarkets. After the report aired, one New York anchorman quipped that it won't be long until computer chips are embedded in consumer's necks allowing them to simply walk past the checkout at the supermarket and be instantly charged for their purchases.



Healthy concept

Here's one to watch in the retail health-care arena: Pharmaca (pronounced Pharm-a-ka), a newly opened concept combining traditional and natural medicine products and services. The flagship 3,800-square-foot store in Boulder, Colo., aims to offer science-based information about prescriptions, over-the-counter drugs, nutritional and herbal supplements, drug/nutrient depletion and drug/herbal interactions, while offering an expanded retail mix. Pharmaca will not advocate one approach over the other, but will arm consumers with information to make their own decisions, says Barry Perzow, co-founder and co-CEO. Customers can sip herbal tea while doing research in the resource library, or consult with a staff member in private booths. The store's staff includes registered pharmacists, certified herbalists, nutritionists and estheticians. Pharmaca's founders hope to expand the concept to other areas of Colorado and beyond.





European blend

Trouble is brewing in Europe, as Seattle-based Starbucks seeks to take the Continent by storm, opening 500 stores in six markets over the next two years. While Starbucks has more than 150 stores in the United Kingdom, it has yet to tackle the European mainland where coffee drinking is something of an art form. Some Italian espresso shops date back to the early 1800s and feature high ceilings, crystal chandeliers and tuxedoed waiters, bringing coffee drinking to a level unseen in the United States. Starbucks plans to open its first branch on the Continent in Zurich, with Milan, Paris and Vienna to follow. PRODUCT DEVELOPMENT



It's a milk thingLook for milk to once again become a hot category now that The Coca-Cola Co. is throwing its weight behind it. Fed up with flat pop sales, the soft drink giant plans to test at least five different milk-based concepts this year, according to a published report. The effort will examine all aspects of marketing, including flavoring, packaging and container size, in an effort to reach school-age children. In addition to the United States, Coke will focus its efforts on areas in Europe and Latin America with high milk consumption. The company curently sells up to 250 million unit cases of drinks to kids every year, and the goal is to increase that volume to 3.5 billion unit cases. Milk could account for a substantial amount of that increase, according to the report.



Spicy new dishesSupermarkets wanting to develop their own award-winning recipe for rotisserie chicken or that signature maca-roni & cheese should plan a trip to the Culinary Center at McCormick Research & Development in Hunt Valley, Md. The center, which opened in November, allows customers and McCormick technical experts to marry culinary art with the science of food technology. "We have a supermarket foodserv- ice program and we do some custom blends for various supermarkets," says Kevan Vettar, manager, culinary product development.

ASSOCIATIONS



SIAL updateApproximately 500 food and beverage manufacturers from 33 countries will be exhibiting at SIAL Montreal, slated for March 4-6.

This world-class product showcase will occupy 200,000 square feet at the Palais des Congres de Montreal exhibition center in downtown Montreal. Twenty-two national pavilions are being organized by such countries as Chile, Denmark, France, Germany, Great Britain, Mexico, Singapore, Spain and the United States.

A highlight of SIAL Montreal will be education seminars on March 5 and 6 conducted by Progressive Grocer and hosted by Len Lewis, Editor-in-Chief, who will present the results of PG's Annual Report of the Grocery Industry.

He will be joined by Jess Grossberg, publishing director, foodservice media for VNU's Bill Communications.

Guest speaker will be Paul Lainis, vice president, global marketing, retailer services for ACNielsen Co., focusing on retail and consumer trends in Canada and Mexico.