Market News

Analyst Says Canadian Grocery Shares Worth a Look

Investors are warming once again to the shares of Canadian food retailers as a profit squeeze from food inflation nears an end, according to a Dundee Capital Markets analyst. In the recent past, intense competition has prevented Canadian supermarket operators from passing on price increases to customers and many of them cut prices to stay competitive as discounter Wal-Mart expanded its food business in Canada. But that trend reversed in the second quarter, said Dundee portfolio strategist and quantitative analyst Martin Roberge. "Retail food prices are posting their strongest year-to-date advance in years, 5.5%, and are now surpassing (the rate of) of raw food inflation, 2.9%," he said in a note. "In other words, the squeeze on companies' margins from soaring food inflation is nearly over." http://ca.reuters.com/article/businessNews/idCAN1244105620080912 Source: Canadian Grocer E-Newsletter, September 26, 2008