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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,
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To: Anthony@Pacific who wrote (19936)3/12/1999 11:02:00 AM
From: Wolff  Read Replies (1) of 122087
 
PPOD toasty..Profit Margins on Food and Supermarkets are like 4%. They are know to be the lowest. Here is from Safeway which is a very well run chain

After-Tax Income (*ttm)
$766.6M

Sales (ttm)
$24.5B

Profitability
Profit Margin (*ttm) 3.1%

Now an agressive long is going to say the Internet will reduce these costs by removing Cashers, but you won't be able to do this. Why
because people will still go into the stores, and stores that understaff will loose to competitors, and in peak demand like holidays people will get burned by late delivers, and for the average Joe there is a supermarket on every corner.

Sooooo, it is going to be easier and faster to shoot out in a car than to wait for a delivery, not to meantion swimming through the on-line menus. Later if it were to show signs of profits, which I doubt, the barriers to entry are very small. Highschool kids could set up a web site to earn money for the club, by doing this service, which the little old lady would rather do anyway.

Summary, Profit margins are tiny everything is VOLUME
Needed audience is not on-line
Come on, there is a store on every corner already
More people in suburbs area than major city
Barriers to Entry, Not existant, Any 14yr old could do this for his neighbors in a second.
Did I mention waiting for a delivery is worse that just doing it!
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