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Market speculates a Safeway sale; analyst suggests not likely

BY Michael Johnsen

NEW YORK — Trading of Safeway shares on Nasdaq were up almost 75 cents in late morning trading on speculation that Safeway soon may be up for sale.

The speculation is borne out of a recent revision in the company’s change in control that would make retention of management easier and cheaper in a take-out, suggested Ed Kelly, Credit Suisse analyst, in a note published Friday morning. "While this is an interesting development, we do not believe it signals that Safeway is suddenly up for sale."

The changes made by Safeway are not uncommon, Kelly noted — Pepsi made a similar change in 2009. "We do not believe [Safeway] is a good candidate for a take-out by a financial sponsor," Kelly commented. "Supermarket retailing is a structurally challenged industry with thin margins."

In addition, the company has poor sales momentum and is more leveraged than it appears, given a large off-balance sheet multiemployer pension liability, Kelly added. "We also do not see an obvious strategic buyer for the company."

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Survey: Bargain shoppers reshape grocery experience

BY Katherine Field Boccaccio

SAN FRANCISCO — A new study released Thursday by MarketTools found that 63% of shoppers said they have changed their shopping habits in the past six months, with the majority reporting changes to seek more value.

According to the study, respondents reported that they buy items with coupons (80%); buy store brands instead of name brands (62%); use store loyalty cards that offer discounts (62%); buy items only when they are on sale (58%); and buy more large-sized products (43%) to save money on grocery bills.

In the search for bargains, shoppers reported that the reason they purchased store brands is to get better value (59% of respondents) and a more attractive price (56%). Additionally, more than two-thirds (67%) of respondents said they use coupons for at least half of their shopping trips, and nearly half (49%) said they use coupons on every, or nearly every, shopping trip. However, many shoppers don’t see coupons as an incentive to try something new: 49% said that a coupon would not prompt them to buy an item they don’t normally buy.

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Study: Phthalates exposure may boost diabetes risk

BY Allison Cerra

STOCKHOLM — A group of industrial chemicals commonly found in cosmetics and plastics may disrupt insulin production, particularly among seniors, according to a study published in Diabetes Care.

Researchers at Uppsala University in Sweden found that when examining 1,000 70-year-old women and men in Uppsala, as part of the PIVUS study, those that were exposed to phthalates — chemicals commonly found in cosmetics, self-care products, solid air fresheners and scented candles — had roughly twice the risk of developing diabetes — even after adjusting for obesity, blood lipids, smoking and exercise habits — compared with those with lower levels. Additionally, certain phthalates were associated with disrupted insulin production in the pancreas, the researchers found.

"Although our results need to be confirmed in more studies, they do support the hypothesis that certain environmental chemicals can contribute to the development of diabetes," said Monica Lind, associate professor of environmental medicine at the section for occupational and environmental medicine at Uppsala University. "However, to find out whether phthalates truly are risk factors for diabetes, further studies are needed that show similar associations. Today, besides the present study, there is only one small study of Mexican women. But experimental studies on animals and cells are also needed regarding what biological mechanisms might underlie these connections."


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