Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Wolff who wrote (23124)	3/22/1999 2:53:00 PM
From: Clayleas	Read Replies (2) of 122087

<Look at the bottom of the article it says that PPOD expects margins of 25%, that is bloody incredible, that they can say that with a straight face.> Actually, its not that incredible. The 25% relates to Gross Margin. I just checked the SWY numbers and they have a gross margin of 29.5%. Of course, that gets eaten up quite a bit with expenses to give the low net margins you are thinking about. In defense of the PPOD business plan, they will have some savings vs. traditional grocers due to greatly reduced real estate and personnel costs, offset by higher delivery costs (which I believe they will try to recover through delivery charges). I believe the real issue will be whether or not people will pay the additional delivery charges for the convenience of having their non perishables delivered to their door, knowing that they will still go to the store for perishables and the odd spur of the moment item they need. On that, I vote no (except perhaps in NYC or parts of Chicago and other cities where it is difficult to use a car).

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