2000 — Retailing in the New Millennium

MMR, June 25, 2001

* As it focuses on the growth of its core retail food business, Weis Markets Inc. announces plans to sell its food service division to Reinhart FoodService of LaCrosse, Wis., one the largest privately held food service distributors in the United States.

* Both houses of the Maine legislature approve, by veto-proof margins, the Act to Establish Fairer Prescription Drug Prices. This move could make the state the first in the nation to set price controls on prescription drugs. The bill, which is being sent to Gov. Angus King, Jr., would immediately establish a pricing board to set suggested lower prices. If prices do not dip by October 1, 2001, the board would decree that all drugs sold statewide cost no more than they would in Canada. Responding to Maine's legislative leaders--as well as to the Vermont state senate, which recently passed a similar bill, and a coalition of New England states that seeks methods of effecting price controls--the pharmaceutical industry says the Maine bill will hurt patients in the state by delaying their access to new drugs. The bill also provokes opposition in Maine from groups who fear that price controls might restrict access to drugs and reduce investments in the state's small biotechnology industry.

* As part of a joint venture with Greek supermarket operator Marinopoulos Group, Carrefour SA, Europe's largest retailer, agrees to merge its business in Greece and expand operations in Cyprus, Macedonia and Albania. The new alliance will encompass 128 supermarkets as well as nine Continent hypermarkets in Greece, generating sales of about $1.1 billion this year. Carrefour will reportedly also construct a supermarket in Budapest and plans to initially invest more than $290 million to build a supermarket chain in Egypt. The first supermarket will be located around the edge of Cairo in response to the lack of available space within the nation's capital. Other foreign retailers drawn to Egypt include British supermarketer J. Sainsbury PLC, which purchased the local ABC supermarket chain last year. Also, German retailer Metro AG plans to establish a supermarket chain around the perimeter of Cairo.

* In an effort to revolutionize purchasing functions by buying, selling, trading and auctioning goods and services on-line, British supermarket operator J. Sainsbury PLC and German retailer Metro AG join forces with original partners Carrefour SA, Sears Roebuck & Co., and Oracle Corp. to create GlobalNetXchange (GNX). The on-line procurement network's retail members together account for about $175 billion in annual purchases from 50,000 suppliers worldwide. Kroger Co., the largest supermarket chain in the United States, announces it will also join the group. Separately, several other business-to-business web exchanges are announced, most notably the WorldWide Retail Exchange, which allies 11 leading food, drug and discount chains.

* In a move designed to boost its growing reputation as a fashion destination and department store alternative, Target Corp. announces a deal with fashion designer Mossimo Giannulli to create a line of apparel exclusively for the discount chain. The new line is expected to be in Target stores next year. Target previously collaborated with architect Michael Graves on a line of home merchandise, and with celebrity makeup artist Sonia Kashuk on cosmetics. Designer Phillippe Starck will introduce an exclusive line of his own next year.