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Supermarkets: 2003 Lead StoriesPublished by: Supermarket Strategic Alert Published: Jan. 2, 2004 - 18 Pages Table of Contents Ahold Fleming Safeway-UK AbstractThe big stories in the supermarket industry in 2003 were Ahold’s accounting scandal and its subsequent battle for survival, Fleming’s demise and the intricate maneuvering around the sale of Safeway UK. All the underscore the inherent weak spots in the sector as a whole: an inefficient business model, debatable accounting practices and concentration that borders on oligopoly.Ahold moved from darling to demon beginning in February. Previously praised for double-digit sales and earnings growth, the unique combination of local marketing and global logistics and a consolidation strategy that acknowledged future share-of-stomach involved food service, the company is now the poster child for corporate mismanagement. Mass was lacking and continued skepticism, because even third-quarter figures for 2003 had to be reissued. Fleming’s fall from grace underscored the inefficiency still built into the supermarket industry in the US. Less than a month after heralding an addition to its c-store supply business, the company filed for bankruptcy protection. Its descent goes back as far as its ‘winning’ of the Kmart supply contract. The slow, slogging sale of Safeway UK presented a sharp contrast to the dissolution of Fleming. Although Wm Morrison made its first bid in the first week of 2003, the final price and details of the sale were not yet complete at year end. |
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