Supermarket Sales Show Inflated Results

Supermarket Sales Show Inflated Results

“Retailers were achieving decent, nominal sales and earnings during the second half of 2011, though there was actually a slowdown in real sales growth because of inflation.” — Andrew Wolf, BB&T Capital Markets   The second half “was a period of tough sledding for the industry as a whole because inflation was running amok." — Scott Mushkin, Jefferies & Co., New York

The willingness by supermarket operators to pass through price increases from food inflation enabled them to achieve nominal sales gains during the second half of 2011, though there was little real sales progress, according to industry analysts.

The combination of inflation in food and gas prices for the next few months is likely to mean more of the same for supermarkets during the first half of 2012, they told SN.

Food inflation amounted to approximately

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