Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Wolff who wrote (23124)	3/22/1999 2:53:00 PM
From: Clayleas	Read Replies (2) \| Respond to 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).

To: Wolff who wrote (23124)	3/22/1999 2:55:00 PM
From: Nazbuster	Read Replies (2) \| Respond to of 122087

PPOD - The whole thing is WAY too capital intensive. At least net companies can stop the spending when their internet ecommerce facility is up and running. The food business is highly competitive and building distribution centers all over the country will be costly. Worse yet, the article shows that others are planning the same building programs.