Grocery Store Industry

This research presents a strategic analysis of the grocery store industry. Included in this research also is a brief strategic plan for a major firm competing in this industry.

The strategic analysis of the grocery store industry is presented in this section. Included in this analysis are (1) threats and opportunities, (2) the financial position of the industry, (3) a cost of capital determination, and (4) an industry performance forecast.

The economic recession in the United States that threatened grocery store sales is receding. In its wake, however, the economic recession has left an environment of increased price sensitivity among grocery consumers (Mulqueen, 1993, p. 1495). This increased price sensitivity on the part of consumers poses a significant threat to the grocery store industry. Rising wage costs and occupancy costs will be more difficult to pass along to consumer in such an environment, causing the attainment of a profit, much less a growth in profits, to be much more difficult for grocery store operators (Mulqueen, 1993, p. 1495).

As the threat of the recent economic recession is waning for the grocery store industry, so is the threat to the industry from warehouse stores (Mulqueen, 1993, p. 1495). As the novelty of warehouse shopping dulls for the typical grocery consumer, however, the appeal of the SuperCenter shopping format is gaining strength (Mulqueen

Related Essays

Business Plan for Women's Clothing Store .... and Women's Wear Daily is one of the most distinguished industry trade papers .... wrong customers, or customers in the wrong mood; eg, a grocery store draws hurried .... (3203 13 )

Wendell Berry .... where an observer can see what is normally piled into grocery carts at any store at any .... The food industry, he says, wants to make the consumer passive and .... (1238 5 )

MPH and MBA Admission Essays .... My parents worked at low-wage grocery store jobs while .... needed to obtain their own convenience store franchise .... desire to work in the healthcare industry grew out .... (1026 4 )

Microbrews Industry .... the case of California, the microbrew industry benefits from .... general region in which the store is located .... negotiated contracts with regional grocery and liquor .... (2049 8 )

WORKPLACE SAFETY IN THE MEAT PACKING INDUSTRY .... growth of branded products associated with corporatization-have arrived in the meat industry. .... of boxed beef has reduced the need for grocery store butchers and .... (9948 40 )

ortunity open to these independents appears to be the forming of buying cooperatives among themselves Weinstein, 1993, pp. 157158). Financial Position of the Industry The financial position of the grocery store industry is presented in the form of a proforma balance sheet. This proforma balance sheet is presented in Exhibit 1, which may be found on the following page. As the data presented in Exhibit 1 indicate, the grocery store industry (as a whole) has a marginal 1.05:1 current ratio, and a vulnerable 0.7:1 acidtest ratio. Cost of Capital Determination The total capital of the industry is comprised of stockholders' equity and longterm debt. Total capital for the industry at the end of 1993 will be approximately as follows: LongTerm Debt $15,110 (millions) Shareholders' Equity 8,305 (millions) Total Capital $23,415 (millions) ======= Longterm debt, thus, accounts for 64.5 percent of the industry's total capital, while shareholders' equity accounts for the remaining 35.5 percent. The mean annual interest rate on the industry's longterm debt is 6.94 perce

Category: Business - G