NEW YORK — Although buyers are still proceeding with caution, economic pressures will result in more supermarket consolidation in 2011, according to a panel discussion held here Thursday.
“A new wave of consolidation seems to be coming, though the list of successful retailers who could be buyers is short, and we believe those few have been trying to learn from their past mistakes,” Meredith Adler, an equities analyst following supermarkets for Barclays Capital said at the panel, which was hosted by DJM Realty and moderated by David Orgel, SN’s editor in chief.
“Nonetheless the conditions seem right, which for the unlucky retailer could mean the closing of many stores and the absorption of the remaining handful into another chain. To be one of the lucky ones, a chain either has to be growing, or to position itself to be bought at a good price.”
The panel including Adler, Andy Graiser, co-president of DJM Realty, and Bill Bishop, chairman of Williard Bishop LLC, said overcapacity resulting from the growth of alternative formats would likely lead more companies to consider selling their assets this year.
Sellers can maximize their opportunities in this wave of consolidation by better managing their real estate, leading to less “cherry picking” and more meaningful deals, Graiser added.