Retail Memo: Morrisons Beats Asda in UK Holiday Market Basket Price Survey... Not Just By A Nose But Also By A 'Mama Mia' DVD

What do whole turkeys, Ocean Spray cranberry juice, After Eight Mints, Aunt Bessie's yorkshire puddings, Ferraro Rocher chocolates, the "Mama Mia DVD and 27 other Christmas holiday-oriented items have in common in the United Kingdom?

Give up?

All 33 items, which also include Hardys Stamp Shiraz-Cabernet, Sauvignon wine, crackers, all the trimmings for the whole turkey and more, were included in a 33 item holiday festival market basket price comparison conducted this week by the United Kingdom trade publication The Grocer.

The British food and grocery industry trade publication compared the retail prices of 33 traditional (we're not sure how the "Mama Mia" DVD got in there though. But more on that later) British yuletide celebration treats at stores run by the UK's leading supermarket chains -- Tesco, Wal-Mart Stores, Inc.-owned Asda, Sainsbury's, Morrisons and Waitrose. In terms of market share, Tesco is the number one chain in the UK, followed by number two Asda, number three Sainsbury's and Morrisons, at number four. Waitrose is about number six or seven, after the Co-op (number five) and about tied with Marks & Spencer, but is considered the country's leading upscale supermarket chain.

The results

Morrisons came in first place in the holiday food, grocery, drink and gift item market basket (or trolley as it's often called in the UK) price comparison.

The supermarket chain is currently selling the 33 typical yuletide treats, including turkey and all the trimmings, crackers, alcohol and gifts, for just £112.06 (pounds).

Wal-Mart Stores, Inc-owned Asda came in a close second place, selling the 33-item holiday trolley basket of goods for £113.32, only £1.26 higher than Morrisons.

Tesco, the UK's top supermarket chain, came in third Its 33-item holiday goody basket costing £117.76.

Purchasing the 33 holiday items at Sainsbury's costs considerably more, £124.85, putting the chain in fourth place, while upscale supermarket chain Waitrose placed last in the 33-item holiday food, grocery, alcohol and gift market basket price survey, with a total cost of £141, which not only is substantially higher (£28.94 more) than winner Morrisons, but also is even much higher than second-to-last place Sainsbury's.

The competition was fierce between Morrisons and Asda.

According to The Grocer, Morrisons has 13 of the lowest priced holiday items on the list, including several chocolate, gift and alcohol items, such as Ferrero Rocher chocolates, Hardys Stamp Shiraz-Cabernet, Sauvignon and the whole turkey.

However, the survey found that Asda fell to second place despite providing 16 of the cheapest or same priced as Morrisons' items - the most of all the retailers. Among these 16 items included After Eight Mints, Aunt Bessie’s Yorkshire puddings and Ocean Spray cranberry juice.

How could this be?

The 'Mama Mia!' effect

It appears Asda's loss fell on on single item -- the "Mama Mia" DVD. The DVD, which we are only now learning is a popular Christmas holiday item in the UK, sells for £2.66 less at Morrisons than at Asda. Therefore, were the DVD not included in the 33-item holiday trolley basket price comparison, Asda would have been the first-place winner over Morrisons.

Non-Abba and "Mama Mia" fans can take this to heart: If you want to purchase only 32 of the 33 items in the price comparison, then Asda is the place to go, as less the DVD consumers can save a few pence getting the other 32 items -- mostly food and drink -- at Asda.

The rumor is, upon reading the results of the holiday market basket survey, in which the only item standing in the way of a first place win for Asda was the Mama Mia DVD, the chain's (fictitious) director of holiday pricing was heard to shout -- "Mama Mia"...and he isn't even Italian. We wouldn't blame Asda if it cried "fowl."

Asda took first place in last year's holiday market basket survey conducted by The Grocer, followed by Morrisons, Tesco, Sainsbury's and Waitrose.

There was no word if the "Mama Mia" DVD was included in the 33-item holiday price comparison last year.

Recessionary food and grocery retailing

The UK food and grocery retailing industry is currently going through a super-competitive period due to the serious recession in the country.

Consumers are flocking to discounters like the German-owned small-format, hard-discount chains Aldi and Lidl. Asda and Morrisons which both operate on a moderate-discount model are holding their owne respectively, and even gaining some market share at the expense mostly of Sainsbury's, Tesco and Waitrose.

Tesco, which has lost some share this year, and is by far the leading supermarket chain in the UK, has recently been fighting back by offering more discounted items in its stores, as well as introducing a new lower-everyday-priced store brand line a few months ago.

Waitrose, the UK's leading upmarket specialty supermarket chain, is hurting probably the most since even upper income British consumers are feeling the pinch from the recession and financial crisis.

Marks & Spencer, which like Waitrose is an upscale food and grocery retailer, and wasn't included in the holiday market basket price survey, also is hurting since its main customer base, which is essentially the same as Waitrose's, also is seeking out discount supermarkets and spending less money on more expensive specialty and premium products at the upmarket chain.

Consumer Trends Memo: The 'Era of Cheap Food' May Be Over in the U.S.; But Good Cheap Eats Can Still Be Found...it's All About Value

New York magazine is just out with its annual "New York Best Cheap Eats" cover issue. The magazine scours the Big Apple every year for its "Best Cheap Eats" issue, which devotes dozens of pages to the restaurants and stores in New York City where consumers can find the best deals on foods ranging from the simple--a slice of pizza--to gourmet-quality meals across nearly every ethnic range.

The magazine's editors say this year's issue will likely be its most popular ever since the poor state of the U.S. economy, which includes soaring food inflation, is driving even many of New York's more affluent residents--not to mention the scores of business travelers, and tourists who flock to the Big Apple this time of year--to search out cheaper alternatives for their meals and food purchases.

The current economy is doing the same to most lower, middle and even many upper-income consumers in every big city, suburb and small town in America.

This year's edition covers what seems like every square inch if New York City's food landscape in terms of the editorial teams search for the cheapest eats in America's largest city.

Among the food categories the special New York magazine "Cheap Eats" issue features include:

The Cheap List
The best cheap eats of 2008.

Chef’s Choice
Top cooks’ favorite cheap eats.

Cheap Eats Consumer Price Index
How the rising cost of food trickles down to pizza and hamburgers.

The Cheapest Of the Cheap
The ten best new things to eat in New York for $5 or under.

Beggars Can Be Choosers
What can you get for a measly dollar these days?

The High-Low $20 Showdown
We asked two very different chefs to create a three-course meal for two using the same $20 budget.

New York magazine also asked two chefs to design a three-course meal, giving them just $20 to complete the task. You can read that story at the link directly above ("The High-Low $20 Showdown). One chef created a more basic meal with the $20, while the other went more high-end and gourmet with the $20 budget.

The more basic (not so basic to many eaters) but tasty looking $20 feast on the cheap is pictured directly below. Below it is the higher-end, gourmet quality menu on the cheap.

Twenty bucks can buy lots of good, cheap eats, as the graphic above shows, if one knows how and where to shop, along with being able to cook, or learning to do so. Click on the graphic for an enlarged view. [Graphic source: New York magazine.]

The chef put together this three-course gourmet dinner, plus wine and desert, for $20. That's value, considering the same meal would easily cost four to five times that amount at a white table cloth restaurant. Click on the graphic for an enlarged view. [Graphic source: New York magazine. Food retailers take note: value gourmet recipes are something consumers are looking for. A three-course gourmet meal promotion using the chef's concept above would be hot.

Consumers are searching out bargains today like food and grocery retailers and restaurant operators have not seen in decades.

At retail, store or private label brand sales are rapidly rising, as are items on promotion. Value is becoming the new black among American consumers, who are being pinched by a combination of soaring gasoline and home energy prices, rapidly-rising food costs, a credit crunch, increasing unemployment and job security, dramatically lowered housing values, and now what looks to be rising overall inflation overall as well.

Good cheap eats no longer are merely for lower-income American consumers. For example, Whole Foods Market, which up until now has been fairly immune from concerns about food prices from its consumer base, has launch what it is calling its "Real Deal" program. The supernatural foods grocer is lowering prices throughout its stores, offering more and deeper price promotions and has even created "value scouts" in-store, who help shoppers find deals and values being offered in the stores.

Mid-range casual dining restaurants like Applebee's for example in the U.S. also are drawing more diners, while higher-end restaurants are putting more basic, lower-priced items on their menus because even affluent consumers are feeling pinched in the down U.S. economy.

As is often the case during bad economic times, behaviors consumers acquire--such as being more price and value conscious when it comes to food shopping and eating out--often stick even once the economy improves.

If true this time around, value and cheap eats could not only become the new black, but also could prove to be the biggest challenge--and as a result a real deal for consumers--to food retailers and restaurant operators in the U.S.

The natural, organic and specialty foods industry also needs to look more closely at how important price and value is becoming to most American consumers. Shoppers are trading down to discount supermarkets. Many are even shopping at salvage grocery stores, which are reporting sales increases of up to 15% in the last year, along with rapidly increasing customer counts in those stores, which sell discontinued, overstock and food and grocery items with slight label flaws.

Further facts: Two U.S. food and grocery retailing chains, Safeway Stores, Inc., which operates nearly 1,800 supermarkets across the U.S., and upscale eastern USA regional chain Wegmans, reported last week sales of their respective store brand grocery items are currently outselling national brands in the stores, both retailers attributing the fact to the poor U.S. economy and consumers' search for greater value.

There's a tipping point at which even the most dedicated natural and specialty foods shopper will buy conventional over natural or organic, or specialty and gourmet. That tipping point in terms of price is unknown. Rather, its defined as "we know it when we observe it." In other words, as we see sales of natural, organic and specialty food and grocer items starting to remain static or even decline, which there currently are some signs of, we can assume price is the primary reason in this current poor U.S. economy.

Therefore, natural and specialty foods retailers and suppliers need to take value very seriously at present or they will lose market share which could take a decade or so to gain back.

We aren't ready to fully proclaim it yet, although we have proclaimed the "era of cheap food" in the U.S. is over...but Natural~Specialty Foods Memo is willing to go as far right now as to say we think the "era of good, cheap eats" may be just around the corner.

Farm-to-Food Memo Pro or Con: Is the Overplanting of Ethanol Crops Responsible For Higher Food Prices?

Natural~Specialty Foods Memo Editor's Note: The current U.S. Federal Government program of providing farmers subsidies and other economic incentives to plant corn to be used to produce ethanol fuel is being hotly debated by the U.S. Congress, which on a bipartisan basis created these subsidies just a few years ago in partnership with President George W. Bush.

However, with the soaring cost of food in the U.S. and elsewhere, including everything made with corn, Congress and others in the U.S. are wondering if creating the economic incentives, which have resulted in a record ethanol corn crop this year, was such a good idea after all.



A number of U.S. Senators and members of the House of Representatives, Republican and Democrat alike, recently called for hearings to evaluate the nation's ethanol policy and the subsidies that are encouraging more corn crops to be planted for the fuel.

The vast majority of corn grown by U.S. farmers is still for food, feed and ingredient uses, but the type of corn grown for fuel is rapidly increasing.

Additionally, U.S. states ranging from mega-California with 38 million people, to farm-belt states like Illinois and Iowa, have passed laws which require gasoline refiners to mix a higher percentage of ethanol, which in the U.S. is made nearly 100% from corn, with petroleum-based gasoline in order to make what's called blended fuels for use in those states. Numerous other states have similar laws and policies.

The result of these laws and policies means even if the U.S. wants to stop offering subsidies to farmers who grow corn crops for fuel, it's going to have a hard time doing so because the demand, created by these mixed-fuel laws, is already in place--and growing. California for example will soon require refiners to add an even higher percentage of ethanol to the petroleum-based gasoline they sell to service stations in the Golden state.

It seems a policy--creating economic incentives for farmers to grow corn for fuel--had its intended results, which was to create more supply of the grain-based fuel in the U.S.

It also appears the policy has had unintended consequences as well, depending on who you talk to, reducing the total acreage previously used to grow corn for food, feed and ingredients, thus creating less supply, resulting in soaring commodity prices for food-grade corn and reduced surpluses in U.S. grain silos.

Point/Counterpoint

Pro: Corn-ethanol production is responsible for soaring food prices

David A. Ridenour is the vice president of the National Center for Public Policy Research, which describes itself as a conservative, free market organization. (http://www.ncppr.org/.

Mr. Ridenour argues the policies creating subsidies and economic incentives for farmers to grow corn for fuel, which many are, has resulted in today's soaring commodity price of corn, the increased costs of meat and poultry, which are fed primarily a corn-based diet, and numerous other foods which are either made from corn or have corn-based ingredients like sweeteners used to produce them.

Read David Ridenour's pro opinion that the growing of corn for fuel use is a leading cause of the current soaring prices for livestock and corn-based foods here.

Con: It's a misconception corn-ethanol is to blame

On the other hand, Bob Stallman,a rice and cattle producer from Texas and president of the American Farm Bureau Federation, says it's a misconception that increased use of corn for ethanol production is the key or only factor driving higher food prices. (http://www.fb.org/.

Read Bob Stallman's con opinion that the increased practice of growing corn crops for ethanol production is what's causing the food price hikes currently being experienced by consumers at the supermarket here.

Natural~Specialty Foods Memo Analysis

You can determine for yourself which of the two arguments made in the essay's above you agree more with.

Each writer makes some fairly strong arguments--and some weak ones as well--regarding his respective positions.

Texas Republican Senator Kay Bailey Hutchison last week called for the U.S. Senate to place a moratorium on the current subsidies and economic incentives the government gives to farmers for planting corn for ethanol production and a freeze on the amount of the fuel produced, until it can be determined if these programs--and the use of corn-based ethanol--are causing the soaring food prices for meats, poultry and foods produced using corn

President Bush, who Senator Hutchison was and is a big supporter of, disagrees with her move to have the Senate consider this plan. Rather, he says ethanol production from corn is a key part of his administration's plan to produce more fuel from sources other than imported oil.

Both Bush and most others--although some corn-belt Republicans and Democrats are silent on the issue--say the long-term goal is to produce ethanol in the U.S. using raw materials like switchgrass, which is a non food-use crop.

However, scientists working on the switchgrass-to-ethanol fuel concept (called cellulosic ethanol) say it will be a number of years before it can be done in any meaningful and plentiful manner.

These researchers and many others also argue the Bush Administration and Congress has allocated nowhere near enough money to fund such research, especially if they want like they say to have switchgrass-to-ethanol technology be able to come on-line anytime soon.

Many of these switchgrass advocates say some of the money currently being used to subsidies farmers to grow more corn for ethanol, should be used to fund the research into switchgrass-to-ethanol technology.

Nearly everybody in the debate agrees corn is merely a short-term solution in producing ethanol; that it's far from the best crop to use to produce the fuel.

Meanwhile, the per-barrel cost of oil seems to increase daily, sitting at about $130 barrel today. This fact, along with $4 a gallon gasoline at the pump and soaring food prices in the U.S., makes the ethanol debate even hotter.

Most experts on the U.S. Congress are saying they don't believe the legislators will touch the current corn-for-ethanol subsidies and economic incentives like Senator Hutchison is suggesting it does. There are too many Democrat and Republican farm state legislators to let that happen.

Additionally, since President Bush apposes any such move, he would veto any legislation in that regard anyway, say the Congressional watchers.

This issue is only going to get hotter, since very few people believe the prices of food, oil and gasoline is going to stop increasing for the rest of the year and into 2009.

This also is a Presidential and Congressional election year in the U.S. Congress is currently on recess for the Memorial Day holiday in the U.S., a time when most of the members go back to their respective districts to attend holiday events and talk with constituents.

You can bet the members will be getting an earful about the perfect economic storm consumers are facing. That perfect storm being a combination of soaring food costs, coupled with never-ending increases of the price of gasoline at the pump, and an overall sluggish and uncertain economy on main street.

Illustration Credit: The illustration at the top of this piece depicting the gas pumps growing side-by-side in a corn field is by Anita Langemach, courtesy of The Gazette, Colrado Springs, Colorado.

Food & Society Guest Memo: While It Won't Result in Starvation; Japan Faces Self-Created Butter Shortage None the Less

Butter spread thin in Japan

Bread is buttered on neither side as the milk product has become hard to find. There are reasons, but try telling that to the bakeries.

By Bruce Wallace, Los Angeles Times Staff Writer

May 18, 2008

TOKYO -- The food shortage that has hit Japan is announced by the glaring gap on supermarket shelves next to the margarine and the sour cream and just above the cheese.

The butter shelf is empty.

The rich yellow stuff has all but vanished from grocery stores across Japan, with the world's second-biggest economy, where fine foods are prized and aisles otherwise groan with abundance. Some stores have tried to ration the few bricks that occasionally arrive by limiting customers to a pack or two, but in most places merchants have been reduced to posting signs apologizing for having none.

Nor does anyone know when butter will be back. Japanese milk production has dropped over the last two years, leaving less available to be churned into butter.

Even bakeries that buy in bulk are finding it hard to get enough, which crimps their ability to turn out the croissants, cakes and quiches that have shouldered their way into the Japanese diet.

"We're in trouble," says Seiko Nakano, 27, who runs Levain, a small but well-known French bakery in a residential neighborhood of Tokyo, who has been told she will not receive any more butter until Tuesday, a month later than expected.

In an attempt to stretch its stock, the bakery has cut down on the number of pies it produces and cut out the extra croissants it usually bakes for the weekend rush.

"We've had to come up with some new items that use less butter, like cookies," Nakano says, standing in front of cleaned-out shelves on a weekday afternoon. "But you're talking about flavor. How can you replace butter?"

As global food shortages and ballooning prices are rocking the desperately poor from Africa to Southeast Asia, Japan's pastry problems qualify as barely more than an inconvenience. No one expects the famously controlled Japanese to riot in the refrigerated sections of supermarkets.

But the case of the disappearing butter has unnerved people here, delivering a psychological blow to shoppers utterly unaccustomed to dealing with shortages.

The butter deficit arises from a convergence of market factors that has chased hundreds of domestic dairy farmers out of business in the last two years. The sequence began when Japanese consumers began to drink less milk, a decline that coincided with a deluge of media coverage airing claims that milk is bad for your health.

Experts say consumption also has been affected by a low birthrate, which means fewer elementary school students getting a free daily carton.

The shrinking demand left the country so awash in milk two years ago that producers on the northern island of Hokkaido were dumping it down sewers. A Hokkaido beer company tried to use some of the excess by brewing a low-malt beer that was one-third milk. Called "bilk" and described as having a sweet taste, the concoction didn't catch on.

But though popularity has declined for milk as a beverage, its use in the production of cheese is expected to jump 15% this year, and demand for the less profitable butter holds steady. The result, the Japanese dairy association explains, is that there is not much milk left to make butter.

"We have plenty of milk; just no butter," dairy deliveryman Kazunari Shimakura says as he unloads cartons of milk outside Levain. Shimakura had never seen a shortage in his 20 years of delivering supplies. When he parks his truck these days, people come up to ask whether he can sell them a pack or two of butter on the side.

Last month, the government stepped in to urge the country's four largest dairy product companies to churn out more butter. And the agriculture board is moving up its scheduled purchases of butter imported from Australia and elsewhere by six months in an attempt to get some back on the shelves. Japan imports about 10% of its butter, but usually does not go to international markets until fall.

This year's butter imports are expected to hit an all-time high and are almost certain to send prices sharply higher.

Food, Economy and Environment Memo: Is the Era of Cheap Food Over?

Food prices have soared throughout the world in the last year. For example, retail prices for staples such as bread, milk and eggs have increased by 20 -to- 30% in just the past 12 months in the U.S., and continue to rise this year.

Writing in the Christian Science Monitor, staff writer Peter Ford says all the experts, analysts and others he talked to for his story all say there's no end in site in terms of rising food prices. Rather, they say it's just a matter of how much the price of retail goods will increase and how fast that increase will be.

Ford says there are two primary causes for this global rise in food prices: the fact that fast-growing and developing countries China and India are buying and eating more food, especially meat, which is resulting in soaring feed grain costs and is reflected in retail price hikes in all grain-based foods and meats internationally.

The second primary cause of soaring food prices is the fact that a greater percentage of land is being used to crow crops like corn, sugar cane, grasses and other feedstuffs to make biofuels.

There is a finite amount of farmland in the world. If 15% or 25% more of that land is being used today to grow biofuel crops than it was two years ago, for example, that means 15% or 25% less land is being used to grow grains, which not only are used to make bread and other foods, but are the primary feed for cattle, pigs, poultry and other animals.

The result is, according to the experts Ford talked to for his piece, a steady diet of increasing food prices for the foreseeable future.

The implications for the food industry are clear: higher costs for ingredients for food manufacturers and marketers, price increases at retail for grocers, and a fear by both that consumers will express their displeasure at constant price hikes in new found ways to an industry that's generally succeeded in keeping the overall cost of food reasonable for consumers.

Read the full Christian Science Monitor article here.