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Food Lion to implement more MVP savings center kiosks

BY Allison Cerra

SALISBURY, N.C. — Food Lion announced Friday that it would add more of its MVP savings center kiosks to help customers save on their grocery bills.

MVP savings center kiosks, which are part of Food Lion’s MVP customer loyalty card program, were introduced in stores last year. Since their introduction, kiosk coupons have up to five times the redemption rate when compared with coupons delivered via traditional distribution channels, Food Lion said.

Money-saving coupon kiosks also can be found at Bloom and at Harveys.

"In these difficult economic times, Food Lion is committed to providing our customers with the lowest prices on the best brands," said David Palmer, director of customer relationship management and interactive marketing at Food Lion. "We have seen a much higher coupon redemption rate among our MVP customers with the MVP Savings Center kiosks when compared to other traditional channels."

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NRF to Federal Reserve: Swipe card fee cap doesn’t go far enough

BY Allison Cerra

WASHINGTON — The National Retail Federation last week responded to the Federal Reserve’s proposal to cap debit card swipe fees at 12 cents per transaction.

The retail trade association said that banks should honor debit transactions at or close to face value, similarly to the way checks are handled. Debit swipe fees currently are 1% to 2% of each transaction, NRF said, totaling about $20 billion a year; card company practices compel merchants to pass these fees along to customers through higher prices. The Federal Reserve estimated that its proposed cap would save merchants and their customers about 70%, or about $1.2 billion a month.

The NRF said the proposal’s “only shortcoming is its failure to carry the principles through to the extent necessary to achieve true market correction in a realm long lacking transparency and competition. History has shown that by adopting at-par presentment for checks, Congress and the board got it right,” NRF said in comments filed with the Federal Reserve Board of Governors on Tuesday. “A century later, Congress has provided the board with the opportunity to get it right again by renewing the principles embedded in the board’s at-par checking rules. When every party bears its own costs, the free market will force all parties to strive to minimize their costs, and every party will have the potential to win.”

The Federal Reserve currently is reviewing comments on the proposed rules, with an April deadline to approve a final version so the reforms can take effect in July.

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Flu activity to drive pharmacy comps

BY Allison Cerra

NEW YORK — The flu may drive consumers to bed, but drug store sales are expected to benefit from an increase in flu activity, according to a Credit Suisse research note.

Credit Suisse research analyst Edward Kelly on Monday noted that as Walgreens and Rite Aid would report their monthly sales on March 3, comparable pharmacy sales would be driven by increased flu activity.

"As of Feb. 19, [the Centers for Disease Control and Prevention] reported that 4.8% of patients visiting healthcare centers in February displayed flu-related symptoms, versus 2% last year and 3.6% in January. IMS script data supports this view, as volume improved 4.5% in the previous four weeks ended Feb. 18, versus being flat during the same period last year," Kelly wrote.

Similarly, Kelly said that drug stores also should expect solid gains on the front end, thanks to the flu activity boost and early inflation.

Looking ahead, Kelly projected that both Walgreens and Rite Aid, respectively, would see a 4.5% increase in February comparable sales versus consensus of 3.3%, and a 1.5% to 2% increase in comparable sales versus consensus of 0.5%. For Walgreens, Kelly wrote, "[we] project a 5% gain in pharmacy (no calendar shift this month), which includes a 150 basis points benefit from increased flu activity," as well as a 3.5% comp increase for the retailer’s front end. As for Rite Aid, "the company should benefit from easier comparisons in both the front-end and pharmacy," Kelly added, with an expected increase of 1.5% in pharmacy comparable sales and a 2.5% increase in front-end sales, thanks to increased traffic from the chain’s loyalty program, Wellness+.

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