Article Abstract:
The grocery store industry will face a number of challenges through the end of 1997, and this makes investment in this industry difficult. The strong performance of grocery store companies in 1996 will be difficult to top in 1997, especially in an era of low inflation, which makes it difficult to pass on costs to the consumer. Competition from discount stores such as Kmart Corp and Wal Mart Stores Inc, aggressive expansion, and merger activity are likely to characterize the grocery industry in 1997.
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Article Abstract:
The grocery store industry is expected to have good earnings and profit margins in 1996. Unit costs are being reduced with economies of scale, and there are increased sales with higher product turnover and better inventory control through technology. Margins are also expanding with better product mixes, but overcapacity could result from expansion. There are several stocks, expansive and defensive, that are good investments.
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Article Abstract:
Grocery stores are reporting good financial results, and earnings are expected to remain good for the next few years. In spite of high stock prices, many chains are rated as good investments with above average safety. Unions are striving for higher wages at chains such as Kroger and Safeway. Nevertheless, promotion of private labels and take-out meals give investors confidence in continued high sales.
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