NEWSWATCH 2008-07-07

WAL-MART SELLS MORE LOCAL PRODUCE

BENTONVILLE, Ark. — Wal-Mart Stores last week said its partnerships with local farmers are up 50% compared with two years ago, and that during the summer months this year, locally sourced fruits and vegetables that are both grown and available for purchase within a state's borders will account for 20% of the produce the company offers. “Offering local produce has been a Wal-Mart priority for years, and we're taking it to a new level with a pledge to grow our partnerships with local farmers,” said Pam Kohn, Wal-Mart's senior vice president and general merchandise manager for grocery.

FAMILY DOLLAR MARGINS, PROFITS UP

MATTHEWS, N.C. — Better-than-expected gross margins and tight control of expenses boosted quarterly net income by 7% for Family Dollar, the retailer said last week. For the third quarter that ended May 31, Family Dollar reported earnings of $64.7 million on sales of $1.7 billion. Although gross margin as a percentage of sales decreased slightly from the same period last year, to 34.6% from 34.9%, the performance was better than officials had anticipated. The decline accompanied a greater shift toward consumable sales, including food, which increased by more than 9%, while items such as seasonal goods and apparel were challenged. Howard Levine, chairman and chief executive officer, said inventory controls and productivity initiatives drove the improved profits despite flat comp-store sales.

WAL-MART IN MINN. LABOR VIOLATION

HASTINGS, Minn. — A district court judge here last week said Wal-Mart Stores is liable for around $6.5 million in back wages for employees who were denied rest breaks and meal breaks or were forced to work without full pay, a lawyer representing a class of around 56,000 plaintiffs told SN. In addition, Wal-Mart violated state labor statutes more than 2 million times — which could cost the Bentonville, Ark., retailer fines of up to $2 billion, according to Justin Perl of the Maslon Edelman Borman & Brand law firm. A jury trial to decide damages is scheduled to begin in October. Wal-Mart spokeswoman Daphne Moore said the retailer is considering an appeal. She added that company policy was to provide meal and rest breaks as required to all employees.

HY-VEE SELLS IN-HOUSE AD AGENCY

WEST DES MOINES, Iowa — The executive running the in-house advertising agency for Hy-Vee has bought the firm from the retailer, Hy-Vee said last week. The Meyocks Group, which was founded as an independent advertising agency here and acquired by client Hy-Vee in 1994, will continue to serve as Hy-Vee's advertising agency of record, said Doug Jeske, chief operating officer and new owner of Meyocks. Jeske said the ownership change would allow Meyocks to grow as an independent firm.

GERRITY'S TO BUY BILO FOODS STORE

SCRANTON, Pa. — Gerrity's Supermarkets plans to purchase a BiLo Foods store in Dallas Township, Pa., from Penn Traffic Co. and convert it to the Gerrity's banner, Joe Fasula, a co-owner of the Gerrity's chain here, told SN. The purchase, which is pending a lease renegotiation, would become the 10th Gerrity's store in the area and mark BiLo's exit from Luzerne County. Gerrity's is a customer of Associated Wholesalers Inc., Robesonia, Pa.