INDUSTRY UPDATE February 25, 2010 Feb 15, 2010 - New Beginnings: Five Decision-Makers Profiled Five industry executives who face fresh challenges in 2010 As the world seeks to wrest itself from the throes of recession, several supermarket companies are also seeking to reinvigorate themselves with new executives and new strategies. In the Related Articles, SN takes a closer look at five of those new executives and the challenges and opportunities they can expect to face in the year ahead. Several supermarket companies have started the new year with new executives and new strategies. This year's Executives to Watch are Julie Dexter Berg, executive vice president and chief marketing officer, Supervalu; Meg Ham, president, Bottom Dollar; Rick Herring, president, Giant-Carlisle; Ron Marshall, chief executive officer, A&P; and Michael J. Teel, CEO, Raley's. At Minneapolis-based Supervalu, Berg brings a strong focus on branding to a company that is home to a conglomerate of retail brands at a time when Supervalu is reorganizing under a new CEO. She is described by observers as a keen strategist who relies on strong analytics in her work. “With superior market knowledge, your opportunity to repeatedly outsmart your competitors goes way up,” she says on her consulting firm's website. Ham, with experience at Delhaize banners Hannaford Bros. and Food Lion, will be charged with stepping up the rollout of the company's “soft discount” low-price concept. “We believe there are certain markets that are underserved by low-cost grocers,” she said. Herring takes over Giant-Carlisle just as the company is preparing to begin integrating the recently acquired Ukrop's Super Markets banner into its Martin's division. A longtime financial executive with an analytical mind, the Ukrop's challenge will be compounded by his effort to step into the top executive post at the chain, observers said. For Marshall, a cost-cutting specialist with a resume that includes both food and book retailing as well as food wholesaling, stepping into the leadership role at Montvale, N.J.-based A&P is a return to his past, in a way. He was a chief financial officer at Pathmark Stores, now part of A&P, before leaving to run wholesaler Nash Finch Co. His Pathmark experience could come in handy as the company seeks to revive the banner and rethink its approach to the market. Teel, too, is returning to his past, as he rejoins Sacramento, Calif.-based Raley's, his family's company. The chain, known for its “foodie” appeal and upscale flair, has been caught in the middle between tough price competitors like Winco and high-quality operators like Whole Foods. “He has his hands full, and it's not going to be an easy game,” George Whalin, principal at Retail Management Consultants, Carlsbad, Calif., told SN.1 Feb 17, 2010 - Regional Chains Poised for Growth: Planet Retail Local supermarket operators are more likely to see growth in 2010 than the "big three" traditional supermarket chains, according to a new report provided exclusively to SN by Planet Retail, based here. Planet Retail's first ever "Top 10 Retailers to Watch in North America "includes seven regional players. The three national operators are all hard discounters. 1 SN – 02/15/2010 2 SN – 02/17/2010 3 SN – 02/17/2010 4 MNB – 02/18/2010 5 SN – 02/19/2010 "Further consolidation is definitely on the horizon, as struggling retailers look to divest unprofitable assets and regional players aim to strengthen their positioning," said Natalie Berg, research director, Planet Retail. "Given that cost control remains a priority for all grocers big and small, acquisitions this year are likely to be of a small scale, enabling retailers to penetrate fill-in markets." The companies to watch are: Ahold USA, Quincy, Mass; Price Chopper, Schenectady, N.Y.; Delhaize, Salisbury, N.C.; WinCo, Boise, Idaho; Dollar General, Goodlettsville, Tenn.; Aldi, Batavia, Ill.; Save-A-Lot, St. Louis; Tops Markets, Williamsville, N.Y.; H.E. Butt Grocery Co., San Antonio; and The Market by Safeway, Pleasanton, Calif. The report also noted that discounters are poised to open 1,250 new stores in 2010, up more than 50% from 800 in 2009. In addition, 2010 will be "another year of experimentation" with the small-box format, "although a nationwide rollout by a U.S. retailer will take years rather than months." 2 Feb 17, 2010 - Fresh & Easy Nears 150 Locations Fresh & Easy Neighborhood Market is on the verge of operating 150 U.S. locations with the opening of four stores this week and four more scheduled to open Feb. 24. The eight openings will bring the chain's total to 145 stores in California, Arizona and Nevada. Of the four openings that took place Wednesday, one is in Phoenix, Ariz.; and the other three are in Southern California (Northridge, Rialto and Ventura). Of the four stores due to open next week, three are in Southern California (Los Angeles; Whittier; and Lakeside, near San Diego) and one is in the central California town of Reedley, about 25 miles southeast of Fresno. Fresh & Easy is owned by the United Kingdom's Tesco. 3 Feb 18, 2010 - Food Lion Launches Price Cut Strategy The Richmond Times-Dispatch reports that Delhaize-owned Food Lion has “launched a new pricing strategy yesterday designed to bring prices down at its 1,300 stores. The North Carolina-based grocer said thousands of products will be discounted when the strategy is completely implemented. The company said this is a long-term pricing strategy, not just a short-term marketing tactic, and would include both national and private brands.4 Feb 19, 2010 — Unified Cites Cautious Consumers in Q1 Sales Dip Unified Grocers here said a shift in consumer demand toward lower-cost items contributed to sales and earnings declines for the fiscal first quarter. Net income for the 13-week period, which ended Jan. 2, fell 4.5% to $3.7 million, while sales declined 4.3% to $999.8 million. “While our net earnings were off slightly, our performance is right where we thought we would be at this point in time,” said Al Plamann, president and chief executive officer of the cooperative wholesaler. “If the economy continues to show signs of stabilizing throughout the year, we believe Unified and our independent retailers will perform well this year.” He said some stabilizing factors are becoming more apparent. “While consumers continue to spend cautiously, our sales during the holiday season reflected an improvement over recent trends, and for the most part, our independent retailers are right in sync with this shift.” 5 6 MVI – 02/19/2010 7 SN – 02/22/2010 8 MNB- 02/23/2010 Feb 19, 2010 — Publix Tops Shopper Satisfaction Survey Publix has topped the American Customer Satisfaction Index for the 16th consecutive year. The retailer scored an 86 out of a 100 point scale, up 4.9% from the previous year. The overall supermarket industry scored a 76, which is consistent with its scores in 2007 and 2008. Other highlights, including changes in scores from 2008: • Kroger scored a 78, up 1.3% • Supervalu scored a 77, up 4.1% • Whole Foods scored a 76, up 1.3% • Safeway scored a 72, down 4% and the only retailer in the survey to have a decline • Walmart scored a 71, up 4.4% Shopper interviews help determine the rankings, which measure perceived value and quality, complaints, shopper retention, and shopper expectations.6 Feb 22, 2010 - IRI: Consumers Hold Fast to New View of Affordability Do-it-yourself preventative care and dining trends launched vitamins (5.7%), natural cheese (5.2%), ice cream/sherbert (4.7%), frozen/refrigerated poultry (4.6%) and wine (4.3%) to the top 10 CPG growth categories list by unit sales in 2009, according to a new Information Resources Inc. Times & Trends report. Consumers took a more conservative approach to spending on chocolate candy (-5.5%) and dog food (-5.4%), since these items became less affordable. They experienced significant price inflation of 11.1% and 12.7%, respectively. The categories are not alone. Higher than average price increases were experienced by 63 of the top 100 CPG categories last year. The trend is expected to continue in 2010. “While these increases are driven by a variety of market factors, most consumers still define value firstly on price and it remains to be seen if CPG and retail companies will be able to make these increases stick,” according to the report. 7 Feb 23, 2010 - The Most Important Meal Of The Day Returns To The Supermarket The Washington Post reports that the recession has chalked up one more victim - breakfast sales at many of the nation’s fast food joints. “Breakfast sales had grown at a ravenous pace during the boom years as busy workers scarfed down sausage biscuits on the way to the office, fueling a $57 billion business and accounting for as much as a quarter of sales at some fast-food chains,” the Post writes. “Chains opened earlier and expanded their morning menus to accommodate the traffic as lunch and dinner sales flatlined. “But as the jobless rate hit 26-year highs fewer people headed to work, and even those who did worried about their spending. So they poured bowls of cereal at home or simply slept in, putting breakfast on the back burner.”8 9 SN – 02/23/2010 10 SN – 02/23/2010 Feb 23, 2010 -Target Sees Spending on Rise, Margins on Decline Target Corp. here said Tuesday that sales and profits were both up in the fourth quarter as consumers seem to be slowly increasing spending on discretionary items in the wake of the recession. The company also said it expects gross margins to be pressured this year by the rollout of expanded grocery offerings in its P-fresh remodels, however, and as it seeks to remain competitive with rival Wal-Mart Stores on those items. "We have a firm policy to be level-priced with Wal-Mart locally on like items. In our zeal to execute that strategy it drives a gross margin rate sharply lower than the average grocer because the average grocer can't compete with Wal-Mart on price," said Gregg W. Steinhafel, chairman, president and chief executive officer, Target, in response to an analyst's question during a conference call discussing fourth-quarter earnings. The company posted a 53.7% gain in net income for the quarter, which ended Jan. 30, to $936 million. Revenues were up 3.2%, to $20.2 billion. Comparable-store sales rose 0.6%. For the year net income rose 12.4%, to $2.5 billion, on revenue gains of 0.6%, to $65.4 billion. 9 Feb 23, 2010 -Unified Seeks Financial Flexibility in 2010 If 2009 was a year of adaptability for Unified Grocers here, 2010 will be a year of flexibility, Al Plamann, president and chief executive officer, told the company's annual meeting here Tuesday. Unified said it plans to take a proactive approach this year, particularly with regard to financial flexibility — something it has been doing over the last 12 months by completing three financial transactions that have enabled the company to boost its borrowing capacity by $75 million "for future opportunities," Plamann said. "We will not be a victim of this downturn," he said. "Hunkering down in a recession is easy, but a proactive approach yields positive results." Unified's mission, he said, will be "success at retail [and] sustainability at wholesale." The cooperative wholesaler weathered the economic storm last year with mixed sales results among its member stores, Plamann said. On the plus side, however, members' total store count climbed by 47 locations; equipment sales continued to increase, as they have for several years; and Unified became an IGA supplier. 10 Feb 24, 2010 - Consumer Confidence Hits The Skids The Conference Board, the New York City-based research group, said yesterday that its Consumer Confidence Index fell “sharply” in February to 46.0, from 56.5 in January, saying that the index is at “historically low levels and is the lowest since April 2009. “ An index of 100 would indicate strong growth. According to a CNN story, “February's present situation index, which indicates how consumers feel about current economic conditions, hit a 27 year low of 19.4, according to the Conference Board. That means that consumers feel things are worse now than they were during the throes of the financial crisis in the fall of 2008 ... Expectations for the future also took a turn for the worse in February. The expectation index, a measure of consumer outlook over the next few months, fell to 63.8 from an upwardly revised 77.3 in January. Only 16.7% of consumers expect to see an improvement in business conciliations over the next 6 months, down from 20.7%. Some 15.3% of those surveyed expect business conditions to get worse over the next six months. 11 MNB- 02/24/2010 12 MNB- 02/24/2010 13 MNB- 02/24/2010 “The outlook for the labor market was even more bleak. The percentage of those who expect fewer jobs to become available jumped to 24.6% from 18.9% in January. And only 9.5% of those surveyed anticipated an increase in their incomes, compared to 11.0% in January.”11 Feb 24, 2010 - LL Bean Recognized As “Customer Service Champ” Bloomberg Business Week is out with its fourth annual ranking of the nation’s most customer service-oriented businesses, and it has awarded the top spot to LL Bean, the Maine-based apparel and sporting goods catalog company. USAA Insurance and Apple garnered the second and third rankings in the survey. According to Bloomberg Business Week, LL Bean was cited for “adapting to the way its customers now shop through the design and features of its Web site and its return policies. It also commended the company for keeping its back-office operations in Maine rather than moving them offshore to save money.”12 Feb 24, 2010 -The Art & Science Of Coupon Redemption The Minneapolis Star Tribune has a story about three Minnesota women who have turned coupon redemption into a fine art; two of them have turned their talents into a website business advising other shoppers, and one of them actually used coupon redemption as a way of saving enough money to retire $50,000 worth of debt. “I spent $300 to get $2,000 in groceries for my family of four last month," says Karen Gunter, one of the website advisors. "People hear that and they think I must have OCD: obsessive coupon disorder." The story notes that “11 percent of shoppers who always use coupons. Sixty-six percent of Americans use coupons either very often or sometimes and 23 percent rarely or never use coupons, according to a 2009 survey by Illinois-based NCH Marketing Services. Those of us who clip or print coupons are using them in record numbers. More than 311 billion coupons were distributed nationwide last year and consumers redeemed 3.2 billion of them, a 23 percent increase from 2008.” The paper also notes that “most coupons are an advertisement for a product we will never buy. Coupon critics complain that most grocery coupons are for highly processed and snack foods. Out of nearly 50 coupons in last week's Red Plum insert, five could be considered meal staples (pasta sauce, bread, vegetable oil, sour cream, and meat entrees). The rest were for fast food, snack food, pet food, vitamins and supplements, hair and makeup products and household cleaning products. Shoppers looking for healthier options have to dig deeper, said Gunter, but they're there.”13 Feb 25, 2010 -Unified Names Goodspeed Chairman Unified Grocers here has elected Richard Goodspeed as its chairman — the first time in the history of Unified or its predecessor company, Certified Grocers of California, that a non- shareholder has been elected chairman of the member-owned coopeative. He succeeds Richard Wright, president of Market of Choice, Portland, Ore. Goodspeed, the principal at Godspeed & Associates here and a member of Unified's board since 2007, spent 45 years as a retailer before retiring in 1998, during which time he was president and chief executive officer of Vons Cos. prior to its merger with Safeway and, before that, president and chief operating officer of American Stores Co., parent of Lucky Stores, where 14 SN – 02/25/2010 15 SN – 02/25/2010 16 SN – 02/25/2010 he worked for 37 years. He also spent four years with A&P, including a year as president of its Family Mart operation. Industry sources told SN Goodspeed's background “made him an attractive candidate to lead Unified's members through this business environment.” Unified also boosted the size of its board by one, to 20 directors, and elected Mimi Song, president and CEO of Superior Markets, also based here. 14 Feb 25, 2010 -GMDC Study Reveals Health-Wellness Shoppers Not Easily Defined Health and wellness shoppers are of different breeds and no one demographic defines them. This is just one of many insights revealed from a multi-year research project begun last year by the Global Market Development Center here. The analysis from Phase I of the research is being made available today to GMDC members in a 180-page downloadable Master Report and companion Executive Summary accessible at GMDC.org. The main objective of the research was to define health and wellness consumers and identify and present future retail sales opportunities across general merchandise, health, beauty and wellness categories. The study details consumers’ level of interest in buying health and wellness items, what health and wellness means to consumers, the top health and wellness categories, and products or services that consumers identify as most important. Analysis from the research revealed today‘s health and wellness consumer is so mainstream that no particular demographic defines them — they are representative of all incomes, genders, educational backgrounds and ethnicities. GMDC Director of Wellness Programs Chris Depetris notes, “Although each consumer‘s level of intensity and passion around health and wellness may differ, the common elements of their lifestyles are identifiable and understanding the trajectory of where these lifestyles will take them is imperative for recognizing future business opportunities for both retailers and suppliers.” The Hartman Group, Bellevue, Wash., conducted Phase I of the research. Next month the research continues with Phase II and more quantitative analysis on 2,000 consumers in five regions. 15 Feb 25, 2010 -Food Made 42% of Americans Sick Since ’08: Survey Four in 10 Americans (42%) indicate they have become sick or ill over the past two years from what they attribute, at least in part, to something they ate, according to a new Harris Interactive poll of 2,010 adults surveyed online between Jan. 13 and 15. In addition, one-quarter (26%) of those who indicate they became sick from something they ate have eliminated that food from their diet entirely. Another 15% indicate that they advised family, friends and colleagues not to eat that food item. Among four types of foods (fresh, canned, frozen and other packaged foods), two in 10 adults are either extremely or very concerned that fresh foods are safe to eat (21%), followed by canned foods (15%), other packaged foods such as boxes, jars, bags, etc. (14%) and frozen foods (13%). 16 Feb 25, 2010 — Safeway Announces Q4, FY 2009 Results: Annual Sales Decline 7.4% Safeway has reported performance results for the fourth quarter and fiscal year 2009 ended January 2, 2010. For the quarter, the retailer reported sales of approximately USD 12.7 billion, a 17 MVI – 02/25/2010 decrease of 8.1% over last year. For the fiscal year, total sales for the company decreased 7.4% to USD 40.8 billion. It should be noted that the fourth quarter and fiscal year 2009 had one less week. Year-over-year comparisons, consequently, benefit fiscal 2008. Q4 2009 • Identical store (ID) sales declined 4.0% (down 4.1% excluding fuel). • Comparable store (comps) sales also declined 4.0% (down 4.1% excluding fuel). • Safeway reported a net loss of USD 1,609.1 million, due primarily to a non-cash goodwill impairment charge of USD 1,974.2 million affecting the Vons and Eastern divisions. Excluding the impairment charge, net income would have been USD 209.1 million, a 38.1% decrease. • Gross margin was reported at 28.64% of sales, a 14 basis point (bp) decrease over Q4 2008. • The retailer spent USD 248.8 million on capital expenditures, which included opening 1 Lifestyle store, completing 20 Lifestyle remodels, and closing 6 stores. FY 2009 • ID sales declined 5.0% (down 2.5% excluding fuel). • Comps declined 4.9% (down 2.5% excluding fuel). • Gross margin was 28.62%, a 24-bp increase over 2008. • Net loss for the year was USD 1,097.5 million, which includes the fourth quarter goodwill impairment charge. Excluding this charge, net income would have been USD 720.7 million, a 25.3% decrease over 208. • Free cash flow grew to approximately USD 1.5 billion, compared to USD 681.0 million last year. • Capex spending for the year was USD 851.6 million (compared to USD 1.6 billion last year), which included opening 8 Lifestyle stores, completing 82 Lifestyle remodels, and closing 22 stores. Currently, 79% of stores are in the Lifestyle format. The retailer has yet to release guidance for fiscal year 2010. Safeway currently operates 1,725 stores in the US and Canada.17 Feb 25, 2010 - Bashas’ Rejects Albertsons $290 Million Buyout Bid The Phoenix Business Journal reports that bankrupt Bashas’ Supermarkets has rejected a $290 million acquisition bid from Boise-based Albertsons Inc. According to the story, “Michael McGrath — a partner with Tucson law firm Mesch, Clark and Rothschild PC, which is representing Bashas’ in the bankruptcy — called the offer ‘unsolicited and unexpected.’” And, he said, “This isn’t as good an offer as Bashas’ has proposed in its reorganization. The reorganization plan keeps the company in the family and pays all the creditors.” Bashas’ filed for Chapter 11 bankruptcy protection last July after being hard hit by both the recession and amped-up competition. The story notes that “Bashas’ has closed about 30 of its 150 stores, resolved disputes with labor unions and reworked some of its leases with landlords worried about losing anchor stores since then.” 18 MNB- 02/25/2010 19 SN – 02/25/2010 20 MNB – 02/26/2010 Albertsons CEO Robert Miller reportedly told Bashas’ Chairman Eddie Basha in a private letter that “such a transaction will help protect the value of Bashas’ business and should be considered by your board and other interested parties before any plan of reorganization is voted upon.”18 Feb 25, 2010 -Safeway Takes $1.8 Billion Charge A massive goodwill write-off in its Vons and Eastern divisions triggered a $1.6 billion loss in the fourth quarter for Safeway, the retailer here said Thursday. The $1.8 billion charge was necessitated by a sharp decline in year-over-year share prices, Safeway officials said. Excluding the charge, Safeway posted net income of $209.1 million for the quarter that ended Jan. 2, down from $338 million in the fourth quarter last year. Those results were in line with analyst estimates. Sales of $12.7 billion in the quarter decreased by 8.1%, driven by an extra week in the previous period, food price deflation, and identical-stopre sales declines of 4.1%, Safeway said. Gross margins as a percent of sales declined as Safeway continued investing in lower everyday pricing. Steve Burd, chief executive officer, said however that those investments have closed the gap between Safeway and its largest conventional store competitors in all of its markets. For the fiscal year, Safeway reported sales of $40.9 billion, down 7.4% from $44.1 billion in a 53-week 2008 fiscal year. The company posted a $1 billion annual loss, or a gain of $720.7 million in net income excluding the goodwill impairment charge. 19 Feb 26, 2010 - Walmart To Cut Greenhouse Gases On The Backs Of Its Suppliers The New York Times this morning reports that Walmart “plans to cut 20 million metric tons of greenhouse-gas emissions by 2015,” but will do so by making “its suppliers do the dirty work of reducing the carbon footprints of their global supply chains.” According to the story, “Wal- Mart stated that it will now select the product it sells in part by judging whether manufacturers are on board with its green initiatives, suggesting that those who are not will have an increasingly hard time getting products on shelves.” The pledge, the Times writes, is “equivalent to taking more than 3.8 million cars off the road by the company's estimate,” and “comes after Wal-Mart last year unveiled a plan to reduce the overall environmental impact of products it sells.” CEO Mike Duke did a webcast with Fred Krupp, head of the Environmental Defense Fund, which helped develop the plan, and said, “Reducing carbon in the life cycle of our products will often mean reducing energy use. That will mean greater efficiency, and with the rising cost of energy, lower costs, making our business stronger." The Times notes that Walmart “has a separate effort to reduce energy use and cut the environmental impact of its 8,400 stores world-wide.”20 Feb 26, 2010 - Target Lays Out 2010 Plans, Has “Guns Blazing” The Wall Street Journal reports that “after more than two years of being outdistanced by Wal-Mart Stores Inc., Target Corp. said ... it is coming out with guns blazing, planning to prove it is the low-price leader and offers better quality than its larger rival. However, Target CEO Gregg Steinhafel also said that Target will “"maintain our focus on fashion, design and a superior store experience.” And Kathryn Tesija, executive vice president of merchandising, said that Target grew market share in 2009 and has “plans in 21 MNB- 02/26/2010 22 MNB – 02/26/2010 place to accelerate that trend in 2010.” Analysts point to an improved private brand program as part of Target’s improving appeal, and suggest that Walmart could stall out a bit because its core shopper base is being hardest hit by the recession, while Target will appeal to a broader consumer demographic with more refined tastes and a little more money, though they are unwilling to trade up to more expensive stores.21 Feb 26, 2010 - Study Shows Positive Impact Of Nutritional Labeling A new study published in the American Journal of Clinical Nutrition suggests that highly scored products in the NuVal Nutritional Scoring System correspond with foods recommended by the Dietary Approaches to Stop Hypertension (DASH) Diet, and that an estimated 4 out of 5 consumers in stores with the system are being positively influenced by NuVal scores. “This study validates what we’ve believed all along—that moms and dads want to buy nutritious foods for their families, but they aren’t always sure where to find them,” said NuVal’s president, NancyMcDermott. “NuVal eliminates that confusion, offering a simple, easily understood solution.”22 Feb 18 - 25, 2010 - Financial Update • Walmart says this morning that its fourth quarter net income was $4.63 billion, up from $3.79 billion during the same period a year ago. Q4 sales were $113.65 billion, up from $108.75 billion a year ago, on US same-store sales that were down 1.6 percent without fuel and down 1.2 percent with fuel. • Canada’s Loblaw Cos. announced yesterday that its fourth quarter earnings were the equivalent of $157.7 million (US), down from $181.6 million (US) during the same period a year ago. Q4 sales were $7 billion (US), down from $7.4 billion (US) a year ago, with same-store sales off by 7.8 percent. • The Campbell Soup Co. said yesterday that its second quarter profit rose 11 percent to $259 million, compared to $233 million during the same period a year ago. Q2 sales were up one percent to $2.15 billion. • Target said yesterday that its fourth quarter earnings were up a whopping 53.7 percent to $936 million, on Q4 sales that were up to $20.18 billion tom $19.56 billion during the same period a year earlier. The improved financial performance was attributed to a successful end-of-year holiday shopping season. • JM Smucker reports that its third quarter revenue grew 3 percent for the quarter to $1.21 billion, with Q3 profit profit up a whopping 74 percent to $135.5 million - driven to a great degree by the company’s acquisition of Folgers coffee from Procter & Gamble. • Dollar Tree Inc. reports fourth quarter profits that were up 28 percent to $135 million, on Q4 sales that were up 12 percent to $1.56 billion. Annual sales rose almost 13 percent to $5.23 billion, with profits of $320.5 million, up from $229.5 million a year ago. 23 MNB – 02/18 – 02/26/2010 • Safeway reported that its fourth quarter sales were down eight percent to $12.69 billion, and a Q4 loss of $1.61 billion, compared to a year-ago profit of $338 million, which it attributed to goodwill impairment charges.” • The Dr. Pepper Snapple Group said that it earned $114 million in the fourth quarter, compared to a loss of $621 million during the same period a year ago. Sales dropped 1 percent to $1.36 billion from $1.38 billion. For the year, Dr. Pepper Snapple reported a profit of $555 million, compared to a loss of $312 million in the prior year. Full-year sales declined 3 percent to $5.53 billion from $5.71 billion. • Caribou Coffee Co. announced yesterday that its fourth quarter net sales were up 12.4 percent to $76.5 million, on same-store sales that were up 0.2 percent. Q4 net income was $3 million, up from $1.3 million during the same period a year ago. Caribou’s annual sales increased 3.4 percent to $262.5 million in fiscal 2009 compared to $253.9 million in fiscal 2008, with net income of $5.1 million compared to a loss of $16.3 million in fiscal 2008. 23