Jun. 25, 2014, 5:46 PM
- Deutsche Bank sees tough times for Supervalu (SVU) and Safeway (SWY) if and when Amazon (AMZN) expands its AmazonFresh grocery delivery service beyond its three current test markets.
- Kroger (KR) should fare better due to its strong price positioning and weighted average market share positions, and natural/organic specialty players are better positioned to absorb AMZN’s expansion, with Whole Food (WFM) least at-risk due to its product mix, differentiated format, strong EBIT margins and very strong balance sheet.
- Morgan Stanley, however, doesn't see online as a major threat to brick and mortar food retailers after its own survey showed consumers’ interest in online ordering - either to be picked-up at store, or delivered to home - is very low.
May. 14, 2014, 5:42 PM
Apr. 30, 2014, 1:34 PM
- Republicans in the Senate have blocked a bill that would increase the federal minimum wage to $10.10 per hour incrementally over 30 months.
- The development sets up minimum wage reform as a major topic during November elections.
- Consumer companies have mixed opinions on the topic. Though some larger employers could feel a pinch from a higher level of minimum wages (MCD, SWY, KR, WEN) - some analysts think retailers (WMT, DG, FDO, DLTR, TGT) selling to lower income brackets could get a boost. There's also some speculation that more mom-and-pop shops will be forced out of business if the minimum wage goes to over $10 per hour.
Apr. 23, 2014, 4:13 PM
Mar. 28, 2014, 11:18 AM
Mar. 24, 2014, 4:13 PM| 1 Comment
Mar. 17, 2014, 9:16 AM
- More than two dozen states are pressuring retail giants to stop selling tobacco products.
- Letters from state AGs went out to Rite Aid (RAD), Walgreen (WAG), Kroger (KR), Safeway (SWY), and Walmart (WMT).
- CVS Caremark isn't in receipt of the request after previously stating it would cease tobacco product sales.
Mar. 13, 2014, 9:02 AM
Mar. 12, 2014, 9:58 AM
- The $40-per-share offer for Safeway (SWY +0.2%) from Cerberus is the lowest valuation on a major food industry merger in the last ten years, according to Bloomberg. The deal price indicates low interest amongst major players for the struggling brand.
- The "go-shop" period of 21 days is expected to be quiet with Kroger (KR +0.5%) seemingly unwillingly to come in over the top with a bid for the whole company.
- Analyst take: Cantor Fitzgerald says the complicated Cerberus deal includes some risk for Safeway shareholders that the sale of property development centers won't generate the estimated returns. If that's the case, shareholders will earn less than the $40 bid price.
Mar. 7, 2014, 9:20 AM
Mar. 6, 2014, 5:10 PM
- As rumored, Supermarket chain owner Albertsons, controlled by an investor group led by P-E firm Cerberus, is acquiring Safeway (SWY). Investors are unhappy with the specific deal terms. (PR)
- Albertson's will pay $32.50/share in cash, distribute proceeds from the sale of Safeway's real estate subsidiary assets and Casa Ley stake (estimated value of $3.65/share), and distribute Safeway's 37.8M Blackhawk Network (HAWK) shares (current value of $3.95/share).
- The deal is expected to close in Q4, has a $400M termination fee, and comes with a 21-day go-shop period. Albertsons plans to fund the deal with the help of $7.6B in debt financing.
Mar. 6, 2014, 3:43 PM
Mar. 5, 2014, 1:41 PM
- A bid by Cerberus to buy Safeway (SWY +1.7%) has been complicated by the emergence of Kroger (KR +2.4%) as a potential bidder for part or all of the company, reports the WSJ.
- Inside sources still give the nod to Cerberus as the favorite to win out due to the risk that a Kroger takeover won't sit well with regulators.
- Shares of Safeway are up 30% over the last 30 days off the takeover buzz.
Mar. 5, 2014, 9:06 AM
- A recent poll by the Wall Street Journal and NBC indicates 63% of American support raising the minimum wage.
- Though the Republicans are expected to challenge anything brought to the floor of the House, there's a growing consensus in DC that some minimum wage legislation will eventually pass.
- Democrats argue that the current minimum wage level of $7.25 per hour is low by historical standards when adjusted for inflation.
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Mar. 3, 2014, 1:17 PM
- Kroger (KR +0.4%) has contacted Safeway (SWY +1.7%) about buying some its assets, according to a report from Bloomberg.
- The grocery store operator is considering acquiring some of the Safeway stores that Cerberus Capital might pass on.
- Though Safeway would prefer to sell itself in its entirety, those hopes are fading.
Feb. 28, 2014, 5:41 PM
- Kroger (KR) gained 4.5% today after a Deutsche Bank analyst said KR shares are trading at a substantial discount given the retailer's metrics, including comparable store sales at ~3% and EPS growth of 8%-12%.
- In keeping its Buy rating on the shares, DB believes "KR stands apart from other conventional grocers given its much greater scale, stronger local market share positions, broad private brand portfolio, and very consistent history of positive non-fuel ID’s.”
- The firm thinks KR or P-E firm Cerberus could acquire Safeway (SWY), estimating the valuation range for a deal at $45-$55, adding to recent rumors about a deal.
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