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Retailers warn of spreading ‘bloodbath’ - The Globe and Mail
Sep. 17 2013| The Globe and Mail | MARINA STRAUSS - RETAILING REPORTER.

The added stress is felt acutely in Canada’s grocery industry, which is the victim of an essentially “zero-sum game,” Perry Caicco, retail analyst at CIBC World Markets, said in a recent report. He projects that sales will pick up by about $1.6-billion this year – with little or no inflation – but that sales tied to the expansion of retail floor space “will eat up most of the sales growth.” As a result, grocers can expect almost no real sales increases this year or next at stores open a year or more, a critical retail measure, he warned.

“The market is not easy,” said Vicente Trius, president of Loblaw Cos. Ltd., which this summer unveiled its massive $12.4-billion deal to acquire Shoppers Drug Mart Corp. to help take on rivals.

“This generates pressure in the market because you have a consumer who spends less,” Mr. Trius said.....Retailers are also teaming up with others to gain economies of scale and round out their businesses. About a month before Loblaw announced its deal for Shoppers, Sobeys said it would buy Safeway Canada for $5.8-billion to help bolster its foothold in Western Canada.
competitive_landscape  retailers  Marina_Strauss  Loblaws  Wal-Mart  Costco  Target  Rona  slow_growth  economies_of_scale  zero-sum_game  mergers_&_acquisitions  M&A 
september 2013 by jerryking
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