Wal-Mart Heating-Up The Competition Against Tesco in the UK (As Well as At Home in the USA)

For the last month we've been writing about a major planned expansion by Wal-Mart, Inc.'s Asda retail division in the United Kingdom (UK), specifically targeted against UK market share leader Tesco. We also were one of the first publications to report as long as six months ago on Wal-Mart's small-format grocery store development (which we now know as Marketside), which will be targeted directly at Tesco's Fresh & Easy Neighborhood Market small-format grocery markets in the Western U.S.

Today, Wal-Mart confirmed and announced its Asda expansion plans in the UK. Asda chief executive Andy Bond said the chain plans to double its rate of expansion in the UK. The retailer will open 20 new (combined food and non-food) superstores a year, 10-12 Asda Living non-foods stores, remodel numerous existing superstores, and grow its Home Shopping business and Asda Direct internet business.

All told, Bond says Wal-Mart/Asda will create 9,000 new jobs in its first year by opening 10-12 new superstores and 10 new Asda Living stores in the UK. Additionally, Asda plans to create 1,500 more new jobs in the first year by expanding its online Asda Direct and Home Shopping businesses. Wal-Mart is investing about $780 million in the expansion.

This is the largest growth program for Asda, the UK's second largest retailer after number one Tesco, since Wal-Mart acquired it in 1999. Tesco has 31.4% of the UK grocery sales market, according to research firm TNS World Panel. Asda has a 16.9% share, followed by Sainsbury's with 16.4%, and fourth-place Morrissons', with 11.5% of the total UK grocery sales market share.

In conjunction with the expansion announcement, Bond also said Asda will immediatly begin a major price-reduction program featuring numerous food, grocery and non-food items in all of its existing 352 stores in the UK. (Tesco has 1,252 stores of various formats in the UK. Notice that Asda has less than a third of the number of stores as Tesco, but only 50% less market share.) Asda's immediate retail price-cutting program is designed to poach shoppers away from number one Tesco and other three of the UK's "big four" grocery retailers by capitalizing on consumers' currently pinched pocketbooks do to an economic slowdown in the UK.

A full-out offensive by Wal-Mart/Asda on Tesco in the UK

Although we've known this major expansion and retail price cutting move has been on the table at Wal-Mart for some time, we didn't know it would be of this size. The nearly $800 million initial investment by Wal-Mart/Asda represents a real, full-out offensive in the UK aimed straight at market share leader Tesco. It also shows Wal-Mart intends to be a major player in the United Kingdom. The creation of 10,500 new jobs in one year will be a welcome boost to that nation's economy.

This offensive move by Wal-Mart, the biggest retailer in the world, vis-a-vis Tesco in the UK, comes on the heels of a defensive Wal-Mart move against Tesco at home in the U.S.

Wal-Mart will open sometime this summer the first three or four of its new, small-format grocery stores named Marketside in the Phoenix, Arizona metropolitan region in the U.S. The 15,000 square foot or so "Small-Marts" are positioned to go head-to-head against Tesco's small-format Fresh & Easy grocery store chain. The British retailer currently has 50 of the small-format, combination discount basic grocery/semi-upscale fresh and specialty foods markets open in Southern California, Arizona and metropolitan Las Vegas, Nevada.

Tesco's entry into the USA with the Fresh & Easy chain--and its aggressive store development schedule which calls for the retailer to have 200 stores open and operating by the end of this year--took Wal-Mart a bit by surprise. However, the mega-retailer from Bentonville, Arkansas didn't take long to retaliate at home and across the pond in the UK, with its upcoming Marketside stores in the U.S., and now the aggressive Asda division expansion in the UK.

It's doubtful though that Tesco, the 3rd biggest retailer in the world, will merely sit still over Wal-Mart/Asda's expansion in the UK. Rather, we expect the chain to ratchet-up it own expansion plans, although they already are rather extensive.

For example, Tesco is moving into the "High Street-format" Department store-style business, with two-store, upscale stores wihich sell food, groceries, electronics and other higher-end goods in the UK. The retailer also is working on a "top secret" small-format, discount grocery store format which if developed would target Germsn discount grocery retailers Aldi and Lidl, which are both rapidly growing the number of stotres they have in the UK and increasing their respective grocery sales market shares.

We also suspect Tesco will match Asda's price discount scheme rather than risk loosing any market share to the retailer at home in the UK.

Depending on by how much, and on how many, grocery items Asda reduces prices on, the UK's other top chains--Sainsbury's and Morrisons'--will likely follow on the price reduction bandwagon as well. This will be good news to UK consumers, but could be bad news to all four of the retail chains' since the UK, like the U.S., is currently going through a strong patch of food cost inflation.

Further, putting Tesco aside for a moment, since Asda and Sainsbury's are so close in market share--Asda at 16.9%, Sainsbury's at 16.4%--we see the Asda move as having a major effect on number three Sainsbury's. To protect its position, the grocer will need to not only match Asda's price reductions, but look at its own current new store development plan in a new light. That new light is the one now being reflected by the Asda growth initiative confirmed today by CEO Andy Bond.

But the real action--and frankly the fun--is focusing on the Wal-Mart/Tesco battle. That's largely because its an across the Atlantic Ocean battle between two giants, both of which are the res[ective food and grocery sales market share leaders at home, as well as attempting to infiltrate each others' business in their respective home-base nations: the USA and the UK. ( Of course, the historic British/U.S. rivalry makes it doubly-interesting as well.)

Asda Likely to Benefit from 'Competion Commission' Report

Despite Asda's new, aggressive growth plan, we don't see the chain catching up with Tesco, which has a healthy UK growth plan of its own in place, anytime soon, considering the British retailer's near-double market share lead over Asda.

However, Wal-Mart/Asda's announcement of its growth program at this time is no mere accident. Some time ago the British government's 'Competition Commission," an economic regulatory body which exists to ensure retail grocery sales competition in the UK, launched an investigation into potentional monopoly power in the supermarket sector. Leading retailer Tesco has been at the center of this investigation by the commission.

The regulatory commission is soon due to present a report on its findings. Many UK retail analysts tell us Asda stands to be the prime beneficiary of the commission's findings in the report.

These analysts say its likley the "Competition Commission" will introduce a new "competition test" into the UK grocery retailing industry. This test will prevent any one supermarket chain from building up a dominant position (excessive market share) in a city or town. The Commission proposed the outlines of this test last Friday in fact. The group's final recommendations are do in May, and it's likely a version of such a test will be a part of that recommendation, our UK industry sources tell us.

Tesco already holds this "monopoly" position in numerous cities and towns in the UK. In fact, there's even a name for it: "Tesco Towns." On the other hand, with only 352 stores, compared to Tesco's 1,252 stores, Asda has much room to grow its new stores throughout the nation. Additionally, Asda doesn't have a similar dominant or "monopolistic" presence in any UK cities or towns at present.

The UK supermarket analysts' tell us if this "competition test" becomes law, it will open the door for Asda to grow nearly as much as it desires. At the same time, it will but a damper on Tesco's new store growth in many instances because the retailer will be limited in its opening of new stores in numerous UK cities and towns where its deamed by the commission to have "monopolistic" status.

The Wal-Mart/Tesco small-format store battle in the U.S.

Meanwhile, in the U.S. which is Wal-Mart country through-and-through, its too early to really speculate on the Wal-Mart-Marketside/Tesco Fresh & Easy Neighborhood Market small-format grocery store battle which will begin later this year.Wal-Mart won't open its first three or four Marketside grocery markets in Arizona until mid-to-late summer of this year.

Currently, Tesco's Fresh & Easy is on a new-store opening blitz. This month the British retailer is opening one new Fresh & Easy store every other day in Southern California, Arizona and Nevada. Today it opened its 50th grocery store in the Southern California desert region city of Palm Desert. At least 10 more new stores are scheduled to open in the next two weeks. The first stores' opened just a little over three months ago.

Based on our extensive store-level observations, interviews with shoppers, store-level workers, and Fresh & Easy suppliers, our analysis is that Fresh & Easy store performance to date is a mixed bag. Some of the stores, such as the one located in the City of Los Angeles and another unit in Orange County, are doing a brisk business. However, the majority of the stores are seeing fairly low overall store counts to date. Additionally, although it's still very early, most of the stores' haven't met Tesco's goal of being primary grocery shopping markets for neighborhood residents. Rather, our analysis shows most shoppers are using the small-format stores as secondary and tertiary shopping venues.

As we said, its still early though. The longest-open Fresh & Easy grocery market, which is located in Hemet, California, has only been open for a little over four months. Nearly half of the 50 stores have been open for just a little over one month.

When Wal-Mart opens its first Marketside grocery stores this summer however, Fresh & Easy will face a direct target in the form of the world's largest corportation and retailer, and the number one food and grocery market share retailer in the U.S. At least three of the first Arizona Marketside stores that will open this summer also are within a couple miles of a similar Tesco Fresh & Easy store. This is no accident, despite Wal-Mart's refusual to admit they are specifically targeting Fresh & Easy in the Arizona market.

When these first Marketside grocery stores open within a mile or two from the Fresh & Easy grocery markets, the battle will become joined. We will be able to see what the world's number one and number three retailers can do mano-a-mano with grocery stores of a similar size (about 13,000 square feet for Fresh & Easy, 15,000 square feet for Marketside) and very similar formats: basic groceries, fresh produce and meats, prepared, ready-to-eat and ready-to-heat foods, and specialty grocery items.

Further, Wal-Mart isn't confirming it, but our sources have been telling us for a couple of months that the retailer has been scouting (and in some cases has found) retail store locations in Southern California, Northern California and Nevada for its Marketside "Small-Marts." In addition to currently having stores in Southern California, Arizona and Nevada, Tesco's Fresh & Easy Neighborhood Market has signed leases for an initial 18 store sites in Northern California, with more to come. The retailer plans to open its first storess in the San Francisco Bay Area in late 2008 or early 2009.

The cross-Atlantic food retailing battle between Wal-Mart and Tesco is heating up. However, there's much more fire to come, both in the U.S. with the upcoming small-format grocery store battle and in the UK, with Asda's major expansion program and the release of the government's "Competition Commission" report in May. Stay tuned. We will be.

Retail Trends Memo: UK's Asda Pioneering the 'Store-Grown' and 'Store-Raised' Niche: Will Raise its Own Kobe-Style Beef and Grow its Own Truffles

A new trend is emerging among food retailing chains. We call it "store-grown" and "store-raised". It's a phenomenon in which a handful of grocers are taking the store-branded or private-label products' process to the next level. "Store-raised" refers to a retailer raising animals to store-brand and sell as fresh steaks, poultry and the like. "Store-grown" is the same process but involving exclusively growing fresh produce and related products for store-branding and sales. UK retailer Asda is taking the lead in these two areas, which we see emerging as a niche trend.

Wal-Mart, Inc.-owned United Kingdom (UK) supermarket chain Asda plc. is taking the concept of store brands to a entirerly new level. Asda CEO Andy Bond tells us the UK's number-two largest retail chain, which heretofore has positioned itself primarily as a discount food retailer, will take a decidely upscale approach and start breeding Japanese Wagyu cattle in England and undercut the prices gourmet department store food purveyers Harrods, Selfriges and others charge for the super-fat-marbled steaks, commonly called Kobe-Style beef.

Kobe beef steaks from Japanese-bred Wagyu cattle are considered the best beef in the world, as well as the most expensive. The beef is so completely marbled with fat that it is graded as beyond prime in terms of its quality. The beef is so expensive that it's generally only offered for sale in gourmet food boutiques, super high-end butcher shops, and the very most upscale of upscale supermarkets.

In order to sell the super-prime beef at more competitive prices, Asda plans to raise its first herd of beef a bit differently than is commonly done in Japan. That first herd, which will be raised for the grocery chain in Yorkshire, England will be a cross between the Wagyu breed and Holstein dairy cattle. The crossed-breed will produce beef with slightly less marbled fat than pure-bred wagyu, but will still be graded above prime, and full of the fat which makes it tender.

Because the Wagyu cattle are being cross-bred with the Holstein cows, Asda can't officially call the beef it sells wagyu. However, it can use the term "Kobe-style" beef, which is the brand name most consumers are familar with anyway. Wagyu cattle also are being raised in the U.S. However, no U.S. supermarket chain is having the cattle raised for it on an exclusive basis like Asda will be doing in England. In the U.S., the beef is generally called "U.S. Kobe-style" beef.

Asda, which currently operates 340 stores and five different retail formats in the UK, isn't only taking the concept of store brands to the next level by initiating what we call "store-raised" with its wagyu beef venture. Bond also says the grocery chain will soon start planting truffle forests in Yorkshire as well, near where the wagyu cattle are going to be raised.

Like Kobe beef, truffles are a delicacy, and generally reserved for the wealthy, or those who don't might spending more than they can afford for the treats which grow beneath the ground. In fact, super high-end restaurants often pair a fat-marbled Kobe steak along with a side-dish of truffles for indulgent--and cash-laden--diners. Lower-end truffles can sell for about $150 pound. Higher-end truffles, like the black truffle, sell for $350 -to- $500, depending on the quality, availability and other variables.

By eliminating the middle-man and growing its own truffles, Asda plans to be able to service the higher-end consumer market while at the same time selling the delicacies for far less than gourmet grocery stores in the UK currently do. Perhaps the retailer can expand the market for both items as well?

Asda's "store-raised" (Wagyu beef) and "store-grown" (truffles) approach is an interesting one as it retains the chain's discount positioning in that it plans to undercut the gourmet retailers' on price, but also demonstrates a new direction the retailer is moving in. That direction is to upscale its product offerings and merchandising--while still retaining its discount positioning--so as to go after Tesco plc., the UK's number one retailer.

Tesco, like Asda, operates numerous formats, ranging from hypermarkets that sell everything from groceries, to electronics and clothing, to Tesco Express stores, small-format, limited assortment convenient grocery market. Tesco also is a leader in the UK in upscale retailing, which is a niche it has been growing into for a few years now.

Asda has a major new store expansion program in progress, backed by its Wal-Mart parent's deep pockets. Wal-Mart is the largest retailer in the world. Tesco is the world's number three retailer.

We see what we term "store-raised" and store-grown" as an emerging trend in the food retailing industry. Whole Foods Market, Inc. has had organic produce grown specifically for the grocer in a limited experiment, and plans to do more. UK upscale grocer Waitrose has also done so. However, other than Asda, we know of no other food retailer who is specifically raising (or having raised) a special breed of animal for its stores. Nor do we know of a retailer who is growing a regular super high-end item like truffles on a regular basis as Asda will soon start doing.

Both of these proprietary concepts, "store-raised" and "store-grown," also have the added benefit of allowing the retailer to tap into the fast-growing "locally-grown" consumer market, if they choose like Asda is doing to have the animals and truffles raised and grown locally. We see this phenomenon then as a double marketing threat: the high-quality control and proprietary marketing benefits of controlling the products, and the advantages of tapping into the local consumer movement.

Look for other retailers to get involved with the "store-raised" and store-grown" concepts as an extension of their store product brands' programs and positioning. There is an "exclusiveness cachet" to doing so, as well as competitive and economic benefits which can be harnassed as a way to differentiate a retailer from all others.

Retail Memo: The Blair Wal-Mart Project

Tony Blair taking a tour of an Asda supermarket after Britain's number two retailer was acquired by Wal-Mart in 1999. "Value Tony" was a champion of low prices for British consumers during his many years as PM.

Call him the "Pro Low-Price Prime Minister." London's Telegraph.co.uk is reporting in tomorrow's edition that the details of a secret meeting between former British Prime Minister Tony Blair and a senior Wal-Mart official just months before Wal-Mart bought UK supermarket chain Asda have finally been released, nine years after the acquisition deal by Wal-Mart was finalized. The meeting occurred in February, 1999. Wal-Mart bought Asda in July, 1999.

The Telegraph reports that Bob Martin, the Wal-Mart senior executive, complained to Blair at the meeting about Britain's restrictive planning rules. The minutes of the secret meeting, released under the Freedom of Information Act, show that Martin told a not unsympathetic Blair that "the main obstacle to Wal-Mart in entering the UK market was zoning and planning controls." As a result, Martin told Prime Minister Blair, Wal-Mart concluded that the only way the mega-retailer could come into the UK was via an acquisition of an existing company.

The minutes are at odds with the Prime Minister's administration, which at the time told the UK press there were no discussions with Wal-Mart at any time about planning and zoning issues.

The minutes also describe an exciting round of lobbying by Wal-Mart officials prior to and surrounding the company's acquisition of Asda, one of Britain's "big four" supermarket chains, along with Tesco, Sainsbury's and Morrisons. Asda is Britain's second largest retailer, after number one Tesco.

The Telegraph report says Wal-Mart's Martin let on in the meeting with Blair and his key aides that "a big deal in the UK might be in the offing." Martin sensed no objection to such a deal from Blair. In fact, the Prime Minister even seemed a bit excited about it.

Later, when the deal was made and Wal-Mart acquired Asda four months after the secret meeting, word of the Tony Blair, Bob Martin meeting became public, although the minutes were not released at the time. When that happened, Blair defended his meeting with Martin, and in fact was happy and pleased with the deal. Regarding the meeting and the Wal-Mart's acquisition of Asda in general, Blair said: "I make no apologies for it whatever. We (British consumers) pay too much not just for our basic goods, but across a range of services."

It appears we can now add the title of "Pro Low-Price Prime Minister" to Blair's growing list of titles and achievements.

Read the full Telegraph.co.uk story here. There's also a link on the Telegraph story to a pdf file of the minutes from the Blair, Martin meeting so you can read them in their entirety if you like.

Ethical Foods Memo: Jamie Oliver vs. Sainsbury's: Grocer Says it Will Stop Selling Factory Farmed Chickens

Friend or Fowl? Yesterday, British celebrity chef Jamie Oliver was eating his humble pie after a terse phone conversation with Sainsbury's CEO Jason King. Oliver, who is the grocer's TV spokesman, apologized to King for 'biting the hand that feeds him' over a factory poultry farming debate flap. Oliver said he was sorry a second time, sending a letter to King after their phone conversation. Today, however, chef Oliver is feeling his oats--and not a humble pie can be found in the Oliver kitchen. Why? Yesterday, CEO King announced the grocer would stop selling factory farmed chickens in its stores. What's next?

Yesterday we wrote about the spat between British celebrity chef Jamie Oliver and Britain's "big four" supermarket chains--Sainsbury's, Tesco, Asda and Morrisons--over the refusal of the grocers to send representatives to debate Oliver about factory poultry farming on his TV program. (Read our Friday, Jan 11 story here.)

The internationally famous chef blasted the four leading supermarket retailers for not coming on the show. Oliver, who is the TV commercial pitchman for Sainsbury's, didn't spare his employer either.

Yesterday's version of this ongoing and increasingly dramatic story has oliver apologizing to Sainsbury's CEO Justin King over the telephone, and in a formal, follow-up letter he sent to the supermarket head a bit later.

Today, it seems that despite King's anger at Oliver for "biting the hand that feeds him" over the debate flap, the celebrity chef has had some major league influence on King--or perhaps with Sainsbury's customers, or both.

While being interviewed on the BBC's Today program yesterday, King announced Sainsbury's will eliminate the procuring and selling of all intensively or "factory farmed" chickens in all its stores. King also said the grocery chain will follow the UK's RSPCA organization's Freedom Food welfare standard for all broiler chickens.

The RSPCA is an organization which has set a series of humane welfare standards for raising and processing birds. These standards include: the prohibition of battery cages, strict limits on the density of the birds in cages, and making sure environmental enrichment is provided for the birds. Such environmental enrichment includes perches and playthings for the birds' stimulation and attentive behavior.

Further, the RSPCA standards call for the chickens to have a regular daytime and nightime, so that they're not kept awake artificially. This element goes with another standard, which is to not allow the birds to be fed around the clock, which some intensive or factory poultry farming operations do. This 24/7 feeding causes the birds to reach a mature weight prematurely.

King's announcement on the program yesterday sent shockwaves through the animal rights community, and suprised Sainsbury's rival supermarket chain CEO's.

Just the day before, the retailer ran full-page advertisements in the major London and suburban daily newspapers stating the grocer had nothing to be ashamed of in terms of the poultry it sells. The supermarket chain also sent letters to all of its loyalty card members. With this announcement coming the very next day, some are seeing it as an about face by the grocer.

Those shockwaves that rippled through the animal rights community in the UK were ones of joy however. The UK group Compassion in Farming called King's announcement a "major, ground-breaking step toward animal welfare."

Sainsbury's has already announced it's in the process of phasing-out the selling of eggs that come from caged hens. This announcement, that the grocer will follow RSPCA guidlines regarding the poultry it sells, should put a major focus on the issue and pressure Sainsbury's rival grocery chains to follow suit.

Sainsbury's CEO King did not announce a date on the radio program when the grocery chain would stop selling poulty that isn't raised and processed following RSPCA standards, and offer only those birds that do. The RSPCA organization has asked King to supply the group with that date.

A numer of industry observers in the UK say they believe Sainsbury's was planning on making this move for some time, but that the Oliver debate flap pushed the grocer's timetable up.

This might be true. However, if it is true, we believe it was a drastic advancement of that timetable. In fact, it looks like Jamie Oliver and his outburst was the catalyst that got CEO King to make the announcement yesterday.

Based on Sainsbury's new position on the factory poultry farming debate, and its phasing out of the sale of birds that don't meet RSPCA standards, we're leaning towards the opinion that Oliver just might remain the grocery chain's TV pitchman. After all, as of today both King, Oliver and Sainsbury's are now on the same page on the issue--and no TV debate was even needed. This story isn't over yet though. As they say on TV--stay tuned.

Resources:

>Read more about the RSPCA and its humane poultry program here.

>You can view the RSPCA website here.

>Read specifically about the RSPCA humane chicken campaign here.

>You can view Sainsbury's corporate website here.

>Read what the UK Soil Association (SA), an important agricultural-oriented group, says about the issue, and about organic and free-range chicken farming here.

Ethical Foods Memo: Jamie Oliver vs. Sainsbury's: The Apology

Friend or Fowl? After biting the hand that feeds him, celebrity chef Jamie Oliver says he's sorry to Sainsbury's CEO Jason King. Despite his apology--both in a phone call and letter to King--the miffed CEO isn't saying if the grocer will renew Oliver's contract and keep the famous chef around as its TV spokesman. As they say on TV--stay tuned.

On Monday in our feature Monday Morning Java we wrote about British celebrity chef and Sainsbury's supermarket chain TV pitchman Jamie Oliver's attack on his employer and Britain's other three-biggest supermarket chains--Tesco, Morrisons and Asda--for failing to accept his invitation to have representatives appear on his TV documentary about factory poultry farming. (Read our Monday piece here.)

Oliver literally gave the verbal equivalent of the single-finger bird salute to Britain's "big four" supermarket chains for not having spokespeople appear on his program to discuss and debate the issue with him, and answer why the chains' sell what is referred to in the UK as "battery birds." These are chickens raised in small cages and subject to what advocates say are cruel methods of slaughter.

Oliver told a number of London-based and other UK daily newspapers and broadcast TV stations he was "extremely upset" over the supermarket chains' not participating in a discussion and debate on his program. "I am really upset," Oliver told the London Daily Mail. "The question is, why didn't they come? What is there to hide?"

Oliver also singled-out his employer Sainsbury's for extra criticism. Of the supermarket chain, which pays the celebrity chef $1.2 million pounds annually for fronting its TV commercials, Oliver told the Daily Mail, "It's shocking that the people I work for didn't turn up (on his program). I just don't know why they didn't." He also had a few more choice words for the supermarket chain and the other three members of the British retail grocery "big four."

Sainsbury's did provide an executive from the company to Oliver's program to be interviewed on the factory poultry farming issue. The executive was interviewed by Oliver for the documentary. Oliver, however, also wanted the grocery chain--as well as the other retailers--to provide a representative to debate the issue after the program aired. The grocery chain declined to do so, saying they felt providing the spokesperson to be interviewed was sufficient.

At the end of our Monday Morning Java piece we asked the question: What will happen to the relationship between chef Oliver and Sainsbury's as a result of his criticism of the supermarket chain? We posed two scenarios: First, Would the grocer pull it's TV advertisements featuring Oliver as a result of the flap? And second, Would Oliver resign over principle or would Sainsbury's fire him?

We got our answer today. Neither of the above has happened--yet. Rather, Oliver seems to have headed things off at the poultry counter so to speak. According to a story in today's Guardian.co.uk, Oliver called Sainsbury's CEO Justin King, and after what the Guardian describes as a "terse conversation," Oliver apologized to King.

Oliver then followed up that rather tense phone conversation with a letter to King in which he formally apologized and said his remarks were "taken out of context." He also told King in the letter he was "incredibly upset" by the publicity, according to the Guardian report.

Sainsbury's has fought back against Oliver's comments. It ran full-page advertisements in yesterday's major UK newspapers, in which it stressed the quality of the poultry its stores sell, and stated it has nothing to be ashamed of in terms of the birds it sells. The grocer also sent letters to members of its loyalty card program proclaiming the same thing.

Factory poultry and egg farming is a big issue in the UK. Each of the "big four" British supermarket chains sells "free-range" birds and "cage-free" eggs in it's stores. All four however also sell chickens and eggs raised in the smaller cages. Each retailer has pledged to stop selling poultry and eggs raised in this manner over the next three to four years. British supermarket chain Waitrose and the UK Co-op chain have already stopped selling birds and eggs raised in the smaller cages.

Meanwhile, King isn't saying if the supermarket chain and Oliver have a future together. He refused to tell the Guardian if Sainsbury's will renew the celebrity chef's media contract.

There might be more reasons than one for this however: CEO King was already a bit miffed at Oliver for a couple reasons. First, his wife was spotted some time ago shopping at a rival Waitrose supermarket by members of the London press, who publicized her shopping trip (including pictures) and Oliver's relationship with Sainsbury's, which everybody who watches TV in Britain knows about.

Further, Sainsbury's management brain trust became rather miffed at the chef 18 months ago, when he said parents who give their kids "sugary crisps (cookies) and fizzy drinks" were "aresholes and tossers."

(for those not familar with British slang, a tosser has two meanings. One meaning--a person who does something stupid or behaves in a ridiculous way--has moved into the mainstream vernacular in Britain. For the original meaning of the word, you will have to look here. And of course, an "arsehole" is near-universal, with just some slight variations in spelling and pronunciation.)

Will Jamie Oliver lose his contract with Sainsbury's? The jury (in this case CEO King) is still out. Stay tuned.

Read the full story from today's Guardian.co.uk here.

Monday Morning Java: Starting the Week Off With A Jolt

Friend or Fowl? Celebrity chef bites the hand that feeds him over strong beliefs on factory poultry farming issue debate

Celebrity chef Jamie Oliver, who stars in TV ads for British supermarket giant Sainsbury's, this morning slammed his employer and Britain's other "big four" supermarket chains for not showing up on his TV program to debate factory poultry farming.

Oliver, who gets paid 1.2 million pounds a year for staring in the Sainsbury's TV ads, recently invited representatives from Sainsbury's, Tesco, Morrisons and Asda (the supermarket "big four") to appear on his TV documentary, "Jamie's Fowl Dinners."

As part of the documentary on factory fowl and egg farming, Oliver discovered that supermarkets pay farmers as little as three pence for a chicken, an amount Oliver says is outrageously low. He invited representatives of the four big supermarket chains to appear on the program and discuss and debate the issue.

None of the four, including his employer Sainsbury's, sent representatives to debate the issue with Oliver on the program. This has outraged Oliver, who is not only a famous chef in Britain, but has an international following among food lovers as well.

Chef Oliver told the London Daily Mail newspaper this morning that "they (the supermarket chains) all refused to take part in the program. "I am really upset," Oliver told the Daily Mail. "The question is, why didn't they come. What is there to hide?"

The celebrity chef particularly singled-out Sainsbury's for his anger. "It is shocking that the people (Sainsbury's) I work for didn't turn up," Oliver told the Daily Mirror. "I just don't know why (they didn't)."

Chef Jamie Oliver cries "fowl" and says "big four" British supermarket chains are "chicken" to debate him over factory poultry farming issue.

A Sainsbury's spokesperson said they provided a senior company executive to be interviewed by Oliver on the program. Oliver interviewed the executive for the show. The spokesperson defended their actions, saying they didn't feel the need to debate the issue since the senior manager was provided and interviewed by Oliver.

Tesco, Asda and Morrison's spokespeople didn't offer any direct reasons as to why they declined to participate in a discussion and debate with Oliver on the factory farming and related poultry issues.

However, all three grocer's said they are very concerned about and working on the factory farming poultry issue, and have each worked to create and sell "cruelty free" raised birds and eggs respectively. Each chain offers "cage-free" eggs for sale in the stores, in addition to those raised using conventional methods. They also offer "free-range" birds for sale, along with organic chickens, in addition to birds raised in the manner characterized by Oliver.

It will be interesting to see if (1) Sainsbury's pulls its TV ads, which are currently running frequently in Britain, featuring Oliver, and (2) If either Oliver resigns his commercial arrangement with Sainsbury's, or the supermarket chain fires him.

Of course, both parties could agree to disagree on the debate attendance issue, and work together to better the poultry farm to retail supply chain in all ways. Stay tuned.

Note: you can watch a video of Oliver offering his opinions of the "big four" British supermarket companies, and their decision not to participate in his discussion and debate on the factory poultry farming issue here. We must say, watching the video this morning over coffee did give us an extra Monday morning jolt.