Seeking Alpha

Food stocks look unappetizing to investors as higher prices don't stick

Food stocks are out of favor after ConAgra (CAG -3.9%) disappoints with its FQ1 report and General Mills (GIS -2.8%) is downgraded by Wells Fargo.

A general theme is emerging out of the sector that consumers in the U.S. are trading down from higher prices.

Decliners: Kraft Foods (KRFT) -2.8%, J.M. Smucker (SJM) -1.1%, TreeHouse Foods (THS) -2.6%, Pinnacle Foods (PF) -1.7%, B&G Foods (BGS) -1.0%.

Related ETFs: PBJ

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Comments (2)
  • weezer
    , contributor
    Comments (10) | Send Message
    Think the continued private brand trend in center store is more a comment on the general state of our economy than on these brand marketers. The imbedded cultural overhead structures from days gone by (and high gross margins gone by) are very difficult for these large organizations to adapt to in competing with lean private brand companies. Without the ability to generate higher shelf prices - and with the internal battle to adapt culture - these companies are in a bind.
    19 Sep 2013, 12:45 PM Reply Like
  • BruceInKY
    , contributor
    Comments (442) | Send Message
    I'm a retailer in consumer discretionary rather than staples. Prices are moving higher, often with no warning that allows the retailer to buy in in order to temporarily buffer the increases. Distributors are hog-tying their sales reps, who are seeing their commissions evaporate. Welcome to deleveraging and devaluation. Unless you work for the gubmint, or are a supplier to the jackals. Forward!
    19 Sep 2013, 01:05 PM Reply Like
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