The Kroger Co.
Customer satisfaction and an enhanced buying experience is the new focus for retailers. The preference for shopping at convenience stores and eating away from home has increased the demand for “mini-markets and supermarkets”. Retailers are capitalizing on this opportunity with new stores, innovative products, huge discounts, and loyalty programs. Let's look at the three retail companies developing and executing appropriate strategies in this transforming retail industry.
Increase in out more »
Kroger (NYSE: KR), the nation’s largest grocery chain, is undergoing major changes including a $2.44 billion acquisition of Harris Teeter (NYSE: HTSI). This acquisition adds 212 stores in eight states, which provides Kroger exposure in new regions. It also gives the company the opportunity to learn about fresh food categories which are highly profitable.
There is also speculation that Kroger will acquire the Great Atlantic & Pacific Tea Co more »
Safeway (NYSE: SWY) is the second largest supermarket operator in the U.S. after Kroger (NYSE: KR), primarily operating as a food and drug retailer. It has many brands of its own such as Safeway, O Organics, Eating Right, Open Nature, Bright Green, etc. The stock has appreciated a commendable 50% this year but its 2Q2013 results declared last month were mixed as it missed consensus estimates on revenue but more »
The American grocery industry has been a hot topic for Wall Street as of late. With new organic value competitors like Sprouts Farmers Market (NASDAQ: SFM) and Fairway Market (NASDAQ: FWM) entering the ring, the odds of picking a true winner become lower. If one looks back in history to the 1950's when similar radical grocery industry shifts occurred, however, you can glean some investing insights.
David vs. the more »
SUPERVALU’s (NYSE: SVU) name might imply something extraordinary, but its results have been less than extraordinary lately, as it struggles with declining store profitability and too many brands. SUPERVALU's untimely purchase of Albertson’s grocery chains in 2006 almost proved to be the company’s undoing, as it had limited recourse to pay off its debt maturities.
Fortunately, private equity giant Cerberus and its partners came to the more »
As part owner of a publicly traded business you should want to own shares in a company that possesses an edge over competitors. The organic food and natural products provided by Whole Foods Market (NASDAQ: WFM) gives this business an edge in the commoditized grocery store arena. Whole Foods Market represents a good investment for the following six reasons.
Whole Foods Market caters to a growing niche where more »
For the last seven years, Amazon (NASDAQ: AMZN) has been a solid performer. Now the stock has exceeded the price targets of many analysts, is it time to sell the stock
Why so negative?
Nearly every bear case I hear with regards to Amazon surrounds either its forward earnings multiple or its margins. However, Amazon is notorious for spending nearly all of its gross profit -- $4.5 billion last quarter more »
Year to date, food inflation has been relatively muted with the CPI falling 1%. Looking forward, raw agricultural commodity costs have fallen, suggesting food inflation could moderate even further. As such, many of the grocery chains can potentially stand to benefit from lower food costs in an economic environment where grocery spending has increased 17% over a four year span.
Investors should pass on this chain
Sell-side analysts can be notoriously fickle, seemingly raising or lowering price targets based simply on whether or not a stock is currently going up or down.
At the same time, though, sell-side research is still highly valued by institutional investors, including hedge funds and pension funds.
Recently, analysts at Goldman Sachs released a list of stocks they believe to be over-valued and ripe for a correction. Are they right to more »
Three retailers compete for your shopping dollars, which one makes the most sense for your investment dollars? Wal-Mart (NYSE: WMT) is one of the largest retailers in the United States and the rest of the world with 10,800 stores operating in 27 countries. While some consumers love the store for its wide variety of merchandise and low prices, others hate it because of the low wages it pays, its more »
The average family of four spends about $400 on food per month according to the USDA. With food prices rising, eating away from home on the increase, and big-box stores such as Target expanding into groceries, Safeway (NYSE: SWY) has instituted several strategies to keep customers coming in to shop. The challenge is whether the programs differentiate Safeway from other grocers.
Safeway implemented the "Just for U" program more »
In the organic and natural grocery business Whole Foods (NASDAQ: WFM) is the largest player in its market, with over 350 stores and annual revenue of $12 billion. Whole Foods also has extremely high margins compared to traditional grocers, achieved by charging higher prices for its high-quality products. But are these margins sustainable? As the company grows to 1,000 stores, which the company has set as its target, will more »
Low customer confidence due to an adverse economic environment has affected the performance of supermarket operators. Additionally, tighter market competition further eroded margins. However, as the economy begins to grow slowly, grocery stores are presented with an opportunity to improve performance. Let us look into which of the following supermarket operators, Safeway (NYSE: SWY), Kroger (NYSE: KR), and Delhaize (NYSE: DEG) is best prepared to reap benefits from a changing more »
Wholesale distributor and independent retailer SUPERVALU (NYSE: SVU) recently released its quarterly earnings. The results were better than expected as the company was easily able to beat consensus estimates.
If you think that investment in a grocer is not a potentially good use of your money, I think you should reconsider because, according to me, if the company sticks to its plans, it should deliver good returns.
Let’s take more »
With sales nearly quadrupling over the last decade, Whole Foods Market (NASDAQ: WFM) has been quite a nice growth story, capitalizing on the trend toward healthier eating and food awareness in the U.S. Whole Foods is also one of my favorite stocks to follow around earnings season, as it has been extremely reactive to its recent earnings reports. A less than stellar report in February created an excellent buying more »
Safeway (NYSE: SWY) senior vice president David Bond purchased 5,000 shares of the company’s stock on July 22, according to a Form 4 filed with the SEC. The filing now places Bond’s direct holdings of the grocery store at about 31,000 shares, in addition to about 5,500 shares in his 401k.
According to Insider Monkey’s analysis, stocks bought by insiders tend to narrowly outperform more »
It is very unusual for a non-cyclical grocery stock to rally 80% in one year's time, but that’s exactly what Kroger (NYSE: KR) has accomplished. The stock, which traded flat in 2010, 2011, and 2012, has taken off, but is it still a good buy?
How Does it Compare?
The only way to know if Kroger still presents value is to compare it to the grocery industry, and more »
P.B. Shelley once said, “If winter comes, can spring be far behind?” Target (NYSE: TGT) has had a bad winter indeed (almost literally), but good times are just 'round the corner. Its first quarter was disappointing, but now, with improving consumer confidence, sales have started picking up. The company is also looking to expand in Canada aggressively, get into the natural and organic groceries business, and has several other more »
Supervalu (NYSE: SVU), Safeway (NYSE: SWY), and Kroger (NYSE: KR) have been up double and even triple digits in the last year. Supermarkets still have some of the thinnest margins of any industry so one has to wonder: is the party over?
Go East, young man!
The excitement over Kroger may be justified as it agreed to acquire Harris Teeter supermarkets, a chain of middle to high end supermarkets located more »
Kroger (NYSE: KR) is planning to buy Harris Teeter Supermarkets (NYSE: HTSI) for $2.5 billion. While it's probably a decent deal, it doesn't change the direction of the supermarket industry. Look at the industry's health-focused maverick instead.
Harris Teeter announced at the start of the year that it was considering selling itself. Since that point the shares have advanced around 30%. Kroger's all-cash more »
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