Companhia Brasileira de DistribuiçãoSão Paulo, Brazil (NYSE: CBD)

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Brasileira de Distribuição Competition

Now Viewing Brasileira de Distribuição's competition in: Grocery Stores and Supermarkets (primary)

Recent Developments

Coupon Clippers Become Coupon "Clickers" - About 11 percent of US households go online to get grocery coupons, according to Scarborough Research. This represents an 83 percent increase from 2005, and could prompt retailers and manufacturers to rethink their advertising and marketing strategies. Other places shoppers look for deals is through the mail, in-store coupons, customer loyalty cards, product packages, daily newspapers, and magazines. Some 53 percent of households still get their grocery coupons from the Sunday paper, making it the number one source for coupon users.

More Consumers Buy Generic to Cut Grocery Costs - As food prices increase, US grocery shoppers are switching to generics. The number of shoppers who say that they're buying generic, also called store, corporate, or private-label, brands is up to 60 percent, according to the Food Marketing Institute. Private-label market penetration is estimated to be growing 5 percent per year globally, while the growth rate for manufacturers' brands is 2 percent, according to Nielsen. Even upper-income shoppers are more willing to buy generic, which has traditionally appealed more to shoppers with limited budgets. Grocery stores see this shift as positive, as they generally earn higher profit margins selling their own in-house brands.

Grocers Turn to Sun for Energy - Some of the nation's biggest grocery store chains are seeing their massive, flat roofs as untapped energy sources. Chains including Safeway, Wal-Mart, and Whole Foods have installed solar panels on some of their stores' roofs to generate electricity. One reason for the recent push is that chains are trying to beat a December 2008 deadline to gain tax advantages for these projects. Many stores also see using solar energy as a way to boost their environmental credentials by cutting use of electricity from coal. Depending on location and weather, solar panels can generate 10 to 40 percent of the power a store needs.

Competitive Landscape

Population growth and consumer tastes drive demand. Because margins are low, the profitability of individual companies depends on high volume sales and efficient operations. Large companies can offer a wide selection of products and have advantages in purchasing, distribution, marketing, and finance. Small companies can compete effectively by offering specialty products, serving a local market, or providing superior customer service. Annual revenue per worker averages $180,000.

Grocery Stores and Supermarkets Industry Forecast

from Hoover's/D&B subsidiary First Research

US personal consumption expenditures of food, a major driver for grocery stores and supermarkets, are forecast to grow at an annual compounded rate of 3.3 percent between 2007 and 2012.

Consumer Spending Growth on Food Slows

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.

First Research Opportunity Rating

The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.

  • Demand: Limited by population growth
  • Need good merchandising
  • Risk: Slowing economy pushes consumers to low-margin products

Industries Where Brasileira de Distribuição Competes

  • Retail
    • Grocery Retail (primary)
    • Consumer Electronics & Appliances Retail
    • Convenience Stores & Truck Stops
    • Discount & Variety Retail
    • Nonstore Retail