Seeking Alpha: Ingles Markets An Okay Supermarket, Sweetened With Real Estate

On the whole, food retailing is not a particularly attractive business in developed markets like the U.S.. Same-store sales growth is typically lackluster, competition is fierce, and margins are thin. New concepts can certainly distinguish themselves, but it is all in all a tough business in which to earn strong returns on capital.

Ingles Markets (IMKTA) is not exactly a tremendous exception. While the company's sales per square foot and margins hold up pretty well relative to the likes Harris Teeter, they definite lag those of Kroger (KR) (which now owns Harris Teeter) or Safeway (SWY), same-store sales growth has been sluggish, and the company's free cash flow generation is not all that impressive. Add in the value of the company's real estate, though, and the picture brightens. The shares currently trade above my "base case" value estimate, but there is upside if commercial real estate prices improve further and/or another supermarket chain looks at Ingles as an incremental growth opportunity.

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Ingles Markets An Okay Supermarket, Sweetened With Real Estate

Investopedia: Kroger Leverages Its Strength To Get Even Stronger

National supermarket chain Kroger (NYSE:KR) appears to be running off the playbook that says strong companies should leverage that strength to put even more distance between them and their rivals. In buying Harris Teeter (Nasdaq:HTSI), Kroger is not only buying a growing, high-quality grocery chain in the Mid-Atlantic, but also positioning itself to take advantage of even more leverage in purchasing, distribution, and logistics. Provided Kroger doesn't interfere with what made Harris Teeter stand out from the crowd, this looks like a deal with good long-term return prospects.

Read more here:
http://www.investopedia.com/stock-analysis/070913/kroger-leverages-its-strength-get-even-stronger-kr-htsi-svu-wmt.aspx

Investopedia: Whole Foods Back On Pace

There will come a time when this is no longer true, but it still seems to be the case that Whole Foods (NYSE:WFM) is a stock you want to buy when comps disappoint and sell-side analysts start collectively clutching their pearls and/or talking about slowing store expansion in favor of capital returns to shareholders. While consumer confidence is still pretty shaky, Whole Foods seems to be doing well with its value positioning and there's still ample store growth potential. Whole Foods isn't cheap today, but I'd be slow to part with these shares if I already owned them.

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http://www.investopedia.com/stock-analysis/050813/whole-foods-back-pace-wfm-tfm-unfi-htsi.aspx

Investopedia: Whole Foods Disappoints, Comes A Little Closer To Value

Whole Foods Market (Nasdaq:WFM) doesn't really run sales, but another quarterly disappointment has put the shares that much closer to a potential value. Whole Foods continues to enjoy good loyalty and a customer base of above-average affluence, and that should pay off down the road. That said, it's clear that these shares aren't exactly cheap by conventional standards and still very sensitive to relative modest shortfalls in reported results.

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http://www.investopedia.com/stock-analysis/2013/Whole-Foods-Disappoints-Comes-A-Little-Closer-To-Value-WFM-BNNY-HAIN-HTSI0215.aspx

Investopedia: Whole Foods Still Not Cheap, But It's A Reliable Grower

Investors can look across the various sectors and industries in the stock market and find many examples of stocks that enjoy seemingly outsized valuation premiums, largely because of the consistent growth that the companies offer. Whole Foods Market (Nasdaq:WFM) belongs on that list, as this high-end food retailer continues to deliver excellent growth but also sports a pretty hefty valuation. Although I wouldn't be in any great rush to sell these shares today, investors will almost certainly have to face an eventual valuation adjustment, and that will likely be a painful process.

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http://www.investopedia.com/stock-analysis/2012/Whole-Foods-Still-Not-Cheap-But-Its-A-Reliable-Grower-WFM-TFM-KR-HTSI1108.aspx

Whole Foods Shoppers Out Of Hibernation

So much for the predictions that the Great Recession would produce a permanent thriftiness in American consumers. As the economy slowly crawls its way towards better health, Whole Foods (Nasdaq:WFMI) is seeing a solid recovery in its sales growth and dusting off the plans to roll out still more of these higher-end grocery stores. 


The Quarter In The Bag
By any standard, Whole Foods had a strong fiscal fourth quarter. Sales jumped almost 15% from the year-ago quarter, on a better-than-6% increase in square footage. Same-store sales were up a very healthy 8.7%, as traffic rose almost 7% and "basket" (basically, how much customers spent) was up about 2%

Strong as that was, the company did just as well below the sales lines. Gross margin ticked up 40 basis points and the company trimmed about 70 basis points out of SG&A. That fueled a 100 basis point bump in operating margin, translating into 46% operating income growth.


The link below leads to the full article on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Whole-Foods-Shoppers-Out-Of-Hibernation-WFMI-WMT-KR-SVU-RUD-WAG-KR1105.aspx