Should Supermarkets Avoid The Public Stock Market?

The Lempert Report
December 15, 2017

The U.S. supermarket stocks lost value through the first three quarters of 2017.

This is bad news since the Dow Jones Industrial Average and the S&P 500 soared 13% and 12%, respectively, through the same period. Kroger Co. fell more than 40% from the start of the year through the end of September. Ahold Delhaize, down 21.5%; Ingles Markets, down 46%; Village Super Markets, down 20%; and Weis Markets, down 35%. What’s going on?

Many pundits say that Amazon/Whole Foods and Walmart are better prepared for the future of food shopping. In fact, Walmart stock is up 13% since the first of the year.

Amazon, clearly the major disruptor in food has always taken a long view approach and Jeff Bezos has often reminded investors and stock holders that it would take years for them to make a profit – and those who stuck with him and believed have made fortunes. Let’s take the pressure off our grocers to take time to reimagine what the grocery experience should be – just as Walmart and Whole Foods has done. If we don’t, the focus may well be on store closures.