Monday, October 15, 2012

Analysts predict better year-end for supermarkets

Industry analysts said earlier this month that they expect the financial performance of supermarkets during the second half of the year to be slightly better than in the first half. Reasons cited include the following:


  • A slowdown in inflation, which may result in better value propositions;
  • Slow but ongoing acceleration in the general economy;
  • More meals at home expected this winter, as compared to 2011 when mild weather resulted in more meals away from home.

Overall, the financial performance for the top 10 publicly traded grocery chains in the first half of 2012 was mixed as compared to the previous year. Sales were up 3.5% and operating income increased 1.2%, but comparable-store sales increased less this year than last.

According to Andrew Wolf, managing director for BB&T Capital Markets, inflation ran at about 3.3% for the first half of the year, so the 3.5% sales gain came almost entirely from inflation.

"As a result, the stronger conventional players generally saw a little bit of improvement in volume trends as inflation dropped from 3.8% in the first quarter to 2.7% in the second - and while comparable-store sales were still down in real terms, they were down less as volume improved."

Top 10 publicly traded grocery chains (ranked by sales volume):
1 - Kroger
2 - Safeway
3 - Supervalu
4 - Ahold USA
5 - Delhaize America
6 - Whole Foods
7 - Harris Teeter
8 - Stater Bros.
9 - Roundy's
10 - Ingles Markets

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