Market Conditions

Grocery Tracker: Weis Markets Up In Q4

This past week saw grocery stocks down again — with one exception — as stateside food deflation continues to eat away at grocers’ bottom lines and investors’ optimism.

International food retail group Ahold Delhaize (AD) saw a minor upward push in the past week, though a broader view shows prices down overall compared to all-time highs in July 2016. Still, AD has maintained a slow, shallow ascent since the beginning of 2017. At the time of writing, AD was worth €20.43 ($21.74), down 0.17 percent from Monday’s close, but still up overall for the week with an estimated market cap over €26.1 billion ($27.8 billion).

Whole Foods (WFM) stock continued on the steady downward trend values have seen since the last week of February. At the time of writing, WFM was worth $28.70, down 0.86 percent from Monday’s close and trending downward still. Whole Food Market’s estimated market cap sat just a smidgen over $9 billion.

Kroger (KR) stock was down for the same period, though its rate of descent let up some from the first week of March, trending toward flatness. While Kroger fell some 10 percent in the week ending March 7, this past week saw values drop less than 1 percent through March 14. At the time of writing, KR was down 0.35 percent from Monday’s close, worth $28.59 per share with a market cap just over $26.64 billion.

Costco (COST) stock followed a similar track to Kroger in the past week, seeing a dip in value but significantly less so than the week prior, again trending toward flatness. At the time of writing, COST was worth $164.50, flat from Monday’s close with a market cap estimate of just over $72.2 billion.

This past week wasn’t one big down note for the grocery space. Mid-Atlantic regional supermarket chain Weis Markets announced strong Q4 and full-year financial results despite falling food prices. Comparable-store sales increased 3.4 percent in Q4, while sales for the same period hit $925.1 million, up 17.6 percent. Weis’ net income also increased in Q4, up 4.1 percent to $17.3 million.

“In 2016, we acquired and converted 44 stores in 96 days and generated more than $3 billion in sales for the first time in our 104-year history,” said Jonathan Weis, chairman and CEO. “We continued to improve every aspect of our operations in 2016, including supply chain, merchandising and in-store experience, which resulted in a year of strong sales and earnings growth.”

For 2016, the grocer saw annual sales increase 6.9 percent to $3.1 billion. Comp sales were up 2.9 percent for the year, and net income was also up for 2016, rising 6.7 percent to reach $63.3 million. Weis Markets’ stock jumped over 7 percent at the news, though values have since declined somewhat.

Weis also recently announced a new store prototype, said Supermarket News, which looks to grow foot traffic by focusing on service and staying on-trend by leveraging the benefits of grocerants — in this case, an in-store juice bar, pub, ice cream shop and dining hall. The location also includes a drive-thru pharmacy, a fuel center, online ordering and pick-up-in-store options. The company reportedly looks to incorporate aspects of the community market prototype in other existing store locations.

In the food investment space, AccelFoods, an accelerator that works to back early-stage food and beverage startups, added some $15 million to its second fund, which will, in part, be used to invest in startups at more stages of development. The recent injection brings AccelFood’s total funding raised to $35 million.

AccelFoods will reportedly dole out between $250,000 and $3 million per deal to back companies ranging from those that haven’t yet generated revenue to startups that rake in $10 million in annual sales, said TechCrunch. Startups in AccelFoods’ portfolio often go on to launch products in Amazon Launchpad’s food store.

In the past, AccelFoods has backed food and beverage startups such as Brami, which produces a protein-rich, bean-based snack food reportedly inspired by a classic Roman snack; Exo Protein Bars, which makes sustainable protein bars and supplements from insect sources like cricket; or Bandar Foods, a startup that looks to combine popular South Asian flavors and ingredients with American favorites.

Last up for this week, Amazon is making another major play in the grocery space — this time, in India.

Over the past few years, Amazon has invested billions of dollars in establishing a presence in India’s fast-growing online retail market. The company developed a logistics network across the country and has risen to the second largest eCommerce player.

Amazon hopes to take advantage of recently loosened restrictions on foreign retailers in India by expanding its online grocery venture into the nation of some 1.3 billion. As of now, Amazon is waiting on India’s Trade Ministry for approval.

If approved, the online retail giant looks to invest $500 million to sell groceries, mostly local produce and culinary staples, direct to consumer via its online platform. The grocery move will allow Amazon to better compete with local rival Flipkart, which also has its sights set on the online groceries, said Reuters.

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