Aldi plans to launch nearly a thousand new US stores for consumers is good news, but it is only for investors in the supermarket industry’s latest round of bad news.
In another challenge entrenched food company, Germany’s Aldi announced that it will spend another $ 3.4 one billion to open new stores. The company intends to have 2500 the United States in 2022, from 1600 today. Aldi, which sells at a deep discount mostly its own brand, has promised $ 1.6 one billion to transform 1,300 stores.
To make matters worse, another German discount grocer is entering the US market. Liddell is to open its first stores in the United States June 15, and plans to price the product up to 50% lower than its competitors.
Ling supermarket grocery costs FAL fight a price war to attract and retain customers stingy. In the domestic food price changes in the annual decline in 2016, that have not yet occurred in 49 years, according to the Ministry of Agriculture.
In this context, Aldi’s move will make life much more difficult competition. “Discount grocery stores like Aldi, Lidl soon increased presence in the United States increased further pressure on Wal-Mart and other grocery retailers to keep prices competitive,” said an analyst at Stifel company. Why is this bad business? Due to lower prices means that companies have to make do with thin profit margins.
The bottom line is, Aldi and Lidl chain impact the entire spectrum of threats, from the largest country in the name of a smaller weight gional players. Here’s a look at three supermarkets in stock, can be used from Aldi rest
Wal-Mart Stores
Wal-Mart Stores (Code: WMT), for example, more than half of its export revenue from groceries, that’s why it has to redouble its efforts, which offer low prices every day. The strategy has been so far, but it costs, investment firm Stifel notes. Focus on everyday low prices to increase traffic and sales, analysts say, but it also put pressure on the profitability of the retailer. From Aldi in brick-and-mortar world increasingly fierce competition, comes just as Wal-Mart is investing heavily in e-commerce repel threats from Amazon.com (AMZN) of.
Wal-Mart shares have been acquired in the past 52 weeks decent 15%. (All returns as June 14), the benchmark Standard & Poor’s 500-stock index is the span of 17% a year earlier. It would be easier for the stock to catch up if Wal-Mart is no more Duoaerdi targeting its market share.
Kroger
Wal-Mart may be the world’s largest retailer, but Kroger (KR) is the largest supermarket operator. This makes it widely exposed to the ongoing price war. UBS (UBS) analyst said Kroger continue to address ongoing food price deflation and increased competition. In fact, the chain may have to make acquisitions, and now the market share has gradually disappeared in the highly competitive price limit and lower, analysts at Credit Suisse wrote. They pointed out that Whole Foods Market (WFM) will become an attractive target. Kroger acquired more upscale Harry in 2014 trumpet Teeter supermarket chain $ 2.5 billion.
Whether Kroger chooses to do so, it should be possible to do so soon. The company’s stock lost 13% in the past year.
SUPERVALU
SUPERVALU (SVU) really find themselves in a pinch, as Shop N ‘Save and Cub Foods plate obtained from pressing on the other hand side Kroger and Wal-Mart, and by Aldi. when SUPERVALU suffer fiscal third quarter ended December 3 accidental loss, chief operating officer, in its stores in at least two-thirds of the time, “said an unprecedented number of new competition. “Note clear, Aldi has been expanding in scale lair Midwest SUPERVALU result in the most recent fiscal fourth quarter earnings were better than analysts expected, but still weak electronic retail business SID seen declining sales and profits. that’s why earlier this year, we say SUPERVALU is a stock investors should avoid parts.
SUPERVALU stock is down more than 11% over the past 52 weeks, as a long-term holders have been even worse. the shares in the past three years has lost 48%.
