Executive Business Briefing

Here is a look at more of Tuesday's top business stories:

Holiday shopping lifts retail sales

HOUSTON, Dec. 11 (UPI) -- TeleCheck Services Inc. said consumers continued steady holiday spending during the first 17 days of the holiday shopping season, lifting retail sales 2.0 percent over the same period last year.

The leading check acceptance company said-store sales have only dropped four-tenths of a percent since the initial day-after-Thanksgiving surge.

"Mild weather along the East Coast and a cold snap in the Southwest helped encourage consumers in those regions particularly to continue their holiday shopping this past week, albeit at a slower pace," said William Ford, TeleCheck's senior economic adviser.

"With job losses and the unemployment rate rising, shoppers may be spending more conservatively this season, but low interest rates and falling gas prices help to ease the financial burden on American families," Ford said.

"Consumer spending has slowed slightly as we enter the third week of holiday shopping, which is characteristic for this point in the season," said Ira Silver, TeleCheck's senior retail adviser.

"Interestingly, we have not seen mid-season spending slow down as much as it has historically. Retail activity has only dropped a half percent since the Thanksgiving weekend, while at the same time last year, it fell nearly 2 percentage points. Of course, the last two holiday seasons saw bigger surges on Black Friday. One other note, Hanukkah came almost two weeks sooner than last year, which means gift purchases for this holiday were made early as well, helping to boost early holiday spending," Silver said.

TeleCheck said sales in the Southeast region jumped 3.0 percent during the first 17 days of the shopping season.

TeleCheck said based on same-store comparison of the dollar volume of checks written by consumers at more than 27,000 of its 272,000 subscribing locations, sales improved 2.2 percent in the Southwest and rose 2.0 percent in the Northeast region.

Sales grew 1.9 percent in the Mid-Atlantic, improved 1.8 percent in the Midwest region of the country and improved 1.5 percent in the West.

TeleCheck is a subsidiary of Denver-based First Data Corp.

Kroger cuts 1,500 jobs

CINCINNATI, Dec. 11 (UPI) -- Kroger Co., one of the nation's largest retail grocery chains, said it will eliminate approximately 1,500 positions, primarily management and clerical, over the next 12 months as part of a plan to reduce administrative costs by $500 million.

Kroger also reported its third quarter net income for the period ended Nov. 10 before merger-related and one-time costs rose to $258.6 million, or 32 cents a diluted share, from $233.0 million, or 28 cents a share during the same period last year.

Analysts on Wall Street had expected the company to post a net income of 32 cents a share, according to Thomson Financial/First Call.

Sales rose 3.8 percent to $11.38 billion from $10.96 billion a year ago.

Total food store sales rose 4.3 percent. Comparable food store sales, which include relocations and expansions, rose 1.4 percent for the quarter, while identical food store sales rose 0.8 percent. During the third quarter, Kroger opened, expanded, relocated or acquired 33 food stores.

"We were pleased with Kroger's third-quarter earnings results, which were achieved through strong expense controls in a difficult operating environment.

However, we were not satisfied with Kroger's sales, which were softer than expected because of the weak economy and challenging competitive conditions in certain markets," said Joseph A. Pichler, chairman and chief executive officer.

Pichler said Kroger remains committed to achieving its goal of reducing net working capital by $500 million from the benchmark set in the third quarter of 1999.

Based on consumers' shopping behavior so far in the fourth quarter, Pichler said Kroger continues to experience softer-than-expected sales in jewelry, floral, and general merchandise categories because of the recession.

As a result, Kroger expects to report earnings per share in the range of 46 to 48 cents for the fourth quarter, excluding costs related to a merger and certain charges.

On this same basis, the company anticipates earnings per share for the full 2001 fiscal year to be in the range of $1.48 to $1.50, an increase of 13 to 14.5 percent from $1.31 a share in 2000, after adjusting for the 53rd week last year.

The company said to help fund additional investments in strategic sales initiatives and operate more efficiently, it plans to reduce administrative and operating costs by more than $500 million during the next two years.

As part of its plan to reduce administrative costs, Kroger will eliminate approximately 1,500 positions, primarily management and clerical, over the next 12 months.

The company said it also plans to merge one existing Kroger division into two adjacent marketing areas.

"We deeply regret having to announce staff reduction plans, especially at this time of year, and we understand this news will be painful for some of our associates," Pichler said.

"However, economic conditions make it necessary for us to implement these actions quickly to maintain Kroger's long-term competitive advantages," he said.

Kroger currently operates 2,401 supermarkets and multi-department stores in 32 states as well as 790 convenience stores, 426 jewelry stores, 177 supermarket fuel centers and 41 food-processing plants.

R.J. Reynolds Tobacco buys Santa Fe Natural Tobacco

WINSTON-SALEM, N.C., Dec. 11 (UPI) -- R.J. Reynolds Tobacco Holdings Inc. said it has signed a definitive agreement to acquire privately held Santa Fe Natural Tobacco Company Inc. in a deal valued at approximately $340 million in cash.

RJR said it expects to close the deal in January 2002, following regulatory and Santa Fe shareholder approvals.

"This acquisition is right in line with RJR's goal of maximizing shareholder value and it will benefit RJR shareholders in the short and long term," said Andrew J. Schindler, chairman and chief executive officer of RJR.

"Santa Fe is a strong and profitable company. Its brand, Natural American Spirit, is a highly differentiated, growing premium brand. RJR's goal is to enhance the strength of Santa Fe, the equity of Natural American Spirit and the company's relationship with its consumers," Schindler said.

R.J. Reynolds said when the deal is completed Santa Fe Natural Tobacco will operate as a wholly owned, independent subsidiary of RJR. Its corporate headquarters in Santa Fe and manufacturing facilities in Oxford, N.C., will continue to operate with current employees.

In the 12 months ending Sept. 30, Santa Fe had net sales of $94.2 million and net income of $26.7 million.

Auto theft on the rise

ARLINGTON, Va., Dec. 11 (UPI) -- The National Insurance Crime Bureau said after a 10-year decline in auto theft rates, newly released statistics indicate auto theft is on the rise in the United States.

Recent statistics released by the Federal Bureau of Investigation Uniform Crime Report show auto theft rates increased 1.2 percent from 1999 to 2000. There were 1,165,559 auto thefts in 2000, compared to 1,152,057 in 1999.

The NICB uses data from the FBI report to compile its annual study of theft rates and most commonly stolen vehicles.

"The troubling 2000 statistics indicate we need to commit more resources to address this problem and help prevent this increase from becoming a trend," said Robert M. Bryant, NICB president and chief executive officer.

Bryant suggested a variety of contributory factors behind the rise, including a sinking U.S. economy that spurs more thieves to steal vehicles for financial gain, the reassignment of many law enforcement officers from auto theft task forces, and open international borders that are difficult to monitor for stolen vehicles.

The group said the Toyota Camry topped the list of most commonly stolen vehicle. The report also showed the other commonly stolen vehicles in the United States included: Honda Accord, Oldsmobile Cutlass, Honda Civic, Jeep Cherokee/Grand Cherokee, Chevrolet full size C/K pick-up, Toyota Corolla, Chevrolet Caprice, Ford Taurus and the Ford F150 pick-up.

"The study confirms that thieves target a wide range of popular passenger vehicle models," said Bryant.

"Thieves typically choose these vehicles because of their huge profit potential when the cars are stripped down to their components, which then supply a vast black market for stolen parts. Further, these vehicles are popular in other countries and organized theft rings will illegally export them to foreign destinations," Bryant said.

He also pointed out there are city-by-city differences in consumer vehicle preference that affect which vehicles are targeted by thieves in an individual metropolitan area.

For example, the study showed American cars are more attractive to thieves in cities such as Chicago, while pickups are more frequently stolen in Dallas. In the Los Angeles area, thieves prefer Japanese models.