Some of the largest food and drug retailers in the U.S. are Kroger (KR), Safeway (SWY), Whole Food Market (WFMI), Supervalu (SVU) and The Great Atlantic and Pacific (GAP). These companies operate in multiple states and take advantage of their size by often selling products at very low prices. Even the world’s largest retail chain, Wal-Mart (WMT), is a major player in the food retail industry with its Sam’s Club division and Wal-Mart Super Stores that have large food sections. Due to continuous over-production and the commodity-like nature of food products, food retail is a low margin business and usually involves cut-throat competition as each retailer tries to take away market share from rivals.
The same business terrain exists overseas for this sector. Wal-Mart’s global competitor Carrefour of France is not listed on the organized exchanges. However five foreign food retailers shown below are available for US investors as ADRs:
|2||China Nepstar Chain Drugstore||NPD||China|
|3||Companhia Brasileira de Distribuicao||CBD||Brazil|
|5||Grupo Casa Saba||SAB||Mexico|
Besides Europe and Asia, Belgian firm Delhaize Group (DEG) operates 1,500 stores in 16 states in the U.S. under the Food Lion, Bloom, Bottom Dollar, Harveys, Hannaford Bros., and Sweetbay names. Israel-based Blue Square Israel Ltd (BSI) has a current yield of 9.25%. China Nepstar Chain Drugstore Ltd. (NPD) is a retail drugstore chain with 2,709 stores located in 12 provinces and 76 cities across China. Companhia Brasileira de Distribuicao (CBD) operates 597 stores in Brazil selling food, clothing, home appliances, etc. Grupo Casa Saba (SAB) is a national wholesale consumer goods distributor in Mexico.