Originally aired September 21, 2010. Grocery store chains have been facing growing competitive pressures from several sources. Consumers are eating out on a regular basis or buying takeout meals. A growing number of stores are selling groceries, with warehouse clubs becoming a major player in food sales. The industry is undergoing consolidation at all levels and is particularly volatile vis-à-vis local and smaller regional chains.
To compete with restaurants, fast food outlets, warehouse clubs and the like, grocery stores have expanded their general merchandise SKUs as well as pharmacy and foodservice operations. While some supermarkets have grown and added more floor space and more nonfood items, other supermarkets have increased their focus on specific or specialty lines of groceries, such as only organic foods, and often cater to particular groups of people. Ethnic grocery stores are some of the fastest growing stores in the country.
Lenders who bank clients in the grocery sector, or aspire to enter the marketplace, need to pay close attention to the myriad of changes taking place which can affect basic creditworthiness and the commensurate quality of collateral such as inventory, script files, real estate and intellectual property.
Presented by:
Michael Keefe, CEO, Hilco Merchant Resources
Ed Zimmerlin, Senior VP and Inventory Appraisal Group Leader, Hilco Appraisal Services
Greg Apter, President and Principal, Hilco Real Estate