December 17, 2007 Issue Posted December 6, 2007, 5:00PM EST

BTW

Charging More for the House Brand

Tesco, the $88 billion British grocery giant, is tackling the U.S. market by putting a premium on many of its house brands. Consider its kids' snack pack, created for the hundreds of Fresh & Easy Neighborhood Market stores it is opening in the next five years. The private-label Smart Box is sold alongside Oscar Mayer's Lunchables in its first 15 stores, launched recently in the Southwest. But Fresh & Easy's clear plastic box—with, say, crackers, string cheese, raisins, carrots, and organic milk—is $2.99. Lunchables, whose offerings include pizza and nachos, goes for $2.10. "Our strategy is to let the food talk for itself," says Simon Uwins, Fresh & Easy's chief marketing officer. About 50% of Fresh & Easy's items are private label, vs. 20% at most supermarkets. Researcher TNS Retail Forward predicts that the shops—smaller than supermarkets, bigger than convenience stores—will have sales of $10 billion by 2015. Chander Alagh, who owns a 7-Eleven in Los Angeles, says his sales dipped after a Fresh & Easy opened nearby on Nov. 8, but just for two weeks. "They're not selling cigarettes," he notes.

—By Christopher Palmeri

An Uptick in Untruths

Dissembling is on the rise in business, according to the latest biennial survey of the nonprofit Ethics Resource Center. Some 25% of nearly 2,000 U.S. employees said they had observed their colleagues or their companies lying to customers, suppliers, workers, or the public, up from 19% in 2005. The industries in which people are most likely to bend the truth: hospitality and food (with 34% of employees observing falsehoods), arts, entertainment, and recreation (also 34%), and wholesalers (32%). Why the rise in prevarication? Patricia Harned, the center's president, says that since Enron, businesses are focusing more on compliance with the law than on building cultures where lying isn't tolerated. Future polls, she says, will ask about specific lies—from "providing false information to shareholders and the public" to "making false promises about the benefits of a product."

—By Aili McConnon

Plenty of Room at the Inn, Cuz

Hotels.com is all for keeping your sofa bed a sofa during the holidays. And it may get its wish. A survey by the online booking service, a unit of Expedia (EXPE), shows that 87% of Americans would like some relatives—especially cousins—to stay in hotels while visiting them this holiday season. Perhaps signaling a generational shift, 40% of 25-to-34-year-olds even preferred their parents to sleep out, vs. 21% of those 45 and over. The same survey asked 1,000 adults how much they thought a night in their guest room was worth. The answer, on average: $149. (The average daily U.S. hotel rate is $93.74, according to Smith Travel Research.) Women put a higher value on home accommodations than did men, perhaps reflecting realities about who changes the sheets and cleans the bathrooms.

—By Fred A. Bernstein

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