To: richardred who wrote (4996)	8/21/2018 1:35:40 PM
From: richardred	of 5127
SFS-sold out position

$SFS- Speculation- This company has been through the ringer in it's past history. IMO at the current price range. Why not one more time? This time by a competitor in food retail? IMO Ahold Delhaize would be a good hypothetical hunter. It would give them better West coast coverage in the US market. The business market could also be an attractive niche to build on. RE-Business customer sales penetration in the Smart & Final banner increased to 30.1% of sales. Gross margin was $169.7 million, a 4.6% increase as compared to $162.3 million in the second quarter of 2017. RE-EC-Gross margin rate was 15.1% as compared to 15.0% for the same period of 2017. Gross margin rate in the quarter was supported by our strategic sourcing, merchandising and pricing initiatives.

Ahold has been buying back their own stock. IMO this means they could be a hunter. Snip>In addition to major supermarket chains Food Lion, Giant Food (of Landover), Giant Martin's (of Carlisle), Hannaford, and Stop & Shop, our U.S. family also includes the country’s leading online grocer, Peapod. Amazon is still in a start up mode establishing a bigger presence in Food Retail. This through a big Whole Foods acquisition in a specialty food retail. ( Organics). Ahold has already has experience & scale in food retail. Just because your a bigger Market Value company doesn't mean you will have competition standing still without a fight. My point being. This leads me to believe more acquisitions will be needed to compete. I also have SFM SPROUTS FARMERS MARKET INC on the watch list.

aholddelhaize.com

The U.S. is our biggest market segment, with our brands generating a revenue in 2017 of more than $43 billion.

The company has been through private equity twice and a IPO in 2015.

Smart & Final IPO prices at low end of range
Smart & Final Stores Inc.'s initial public offering of 13.45 million shares priced at $12 a share, the low end of its expected range of $12 to $14.


Consolidation and private-label growth trending in food-retail sector

Supermarkets are seeking to reduce the number of suppliers, modify presentation and packaging to increase consumer appeal, and cut storage and distribution costs.



According to Global Trends Impacting the Market for Packaging Machinery 2018, a new report by PMMI Business Intelligence, price pressure within the food and beverage sectors is forecast to be the highest of any industry, driven by pressure from customers further down the supply chain.

The grocery market has faced significant consolidation in recent years, with grocery giants such as Albertsons, Kroger, Woolworths and J Sainsbury’s acquiring regional or mid-sized competition in an effort to avoid losing market share and increase economies of scale.

This consolidation trend is expected to continue for traditional brick and mortar stores as they are increasingly threatened by competition from non-traditional retailers attempting to break into this market - such as Amazon - or pharmacies such as CVS stocking more healthy and convenient food items.

As the food retail market becomes more consolidated and price sensitive, food producers are working closely with their machinery suppliers to respond to such pressures from powerful retailers.

The food retail sector has also enabled growth in sales of private-label goods that increase pressure on branded food processors with lower-cost alternatives. These have previously been perceived as low quality, budget foods; however, their sales have grown considerably over recent years due to improved marketing and expansion of product lines, as well as the squeezed disposable incomes of many consumers.

The success of private labels has increased supermarket power and increased pressure on the food supply chain. Many brands have responded by focusing on high-quality products and differentiating their product ranges through modifications to content, packaging and portion size. This has driven investment in packaging machinery as producers are modifying processes and introducing new lines in packaging machinery.

Source: PMMI Business Intelligence, “Global Trends Impacting the Market for Packaging Machinery 2018.” Download the full report here.

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