Axfood - Competitors

Axfood Competition

Now Viewing Axfood's competition in: Food Distributors

Recent Developments

Major Food Distributor Avoids Strike - Drivers for food distributor SYSCO in New York have been considering a strike because of wages and healthcare issues, but the strike was recently avoided thanks to negotiations between SYSCO and local unions. Amid rising food and fuel prices, the strike could have significantly hurt SYSCO's local operations. According to the deal SYSCO negotiated with the union, drivers will receive raises, but will also be required to pay more for their healthcare benefits.

Fuel Prices Spur Innovation - Rising diesel fuel prices, up $1.56 a gallon in mid-May 2008 compared to one year ago, are causing problems for distributors who are already paying higher prices for some foods. However, the high prices are encouraging innovation from delivery truck makers, which could save food distributors fuel costs long-term. Recently, Kenworth announced 30 percent fuel savings through its new diesel-electric hybrid delivery trucks, and Carrier Transicold has a new trailer refrigeration system that can use either diesel or electric power, saving significant amounts of diesel fuel.

Experts Predict Continued High Prices - Food distributors are forced to choose between absorbing higher food costs or passing them to customers. According to experts, these pressures will continue at least through 2010, when food prices should fall somewhat in the US because of increasing production. Food prices are rising due to multiple factors, including increasing biofuel production (such as ethanol) and several global droughts, factors that experts don't see going away in the immediate future.

Competitive Landscape

Demand is driven largely by demographic shifts, particularly trends in population and age, working women, race and ethnicity, household size, and levels of disposable income. The profitability of individual companies depends on a good product mix and efficient operations. Large distributors are advantaged by bulk purchasing and economies of scale in distribution. Smaller companies can compete effectively by specializing in organic, natural, or kosher products or focusing on a geographical area. Average annual revenue per worker for a typical company is $675,000.

Full Industry Overview For Food Distributors

Food Distributors Industry Forecast

from Hoover's/D&B subsidiary First Research

Domestic demand for food, an indicator for food distributors, is forecast to grow at an annual compounded rate of 3.9 percent between 2007 and 2012.

Demand Growth for Food Steadies

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.