The Supermarkets and Grocery Store Industry in the United States is extremely competitive. With industry revenues of $491.2 billion, it is important to determine the revenue contributions from the major players in the industry. Not only is revenue contribution an important aspect when comparing financials, but so is net income. A company may have high revenues, but if their costs are also high, they will have little profit or net income. It is important when looking at the major players, that you compare their financial information.
This post reflects important financial information involving Whole Foods and its two competitors, Kroger and Safeway. The financial information I chose to display in two separate graphs are Revenue and Net Income.
This chart represents revenues for Whole Foods, Kroger, and Safeway over a three year period. As you can see in the graph, Kroger has significantly higher revenues than both Whole Foods and Safeway. This is when it becomes important to look at the net income of the three companies. While Kroger and Safeway both have much higher revenues than Whole Foods, it is important to determine if their profit is also much higher than Whole Foods.
In the most recent year that information is available, Net Income for the three companies is fairly similar. All three companies hover around the $500,000 mark. This is why it is important to look at multiple aspects of financials when comparing companies because from the revenue graph it looks like Kroger is much better off financially than Safeway and especially Whole Foods. However, if you look at this graph, Whole Food’s net income rises over the three years while both Kroger and Safeway rise from 2009 to 2010 and then fall from 2010 to 2011. Whole Foods has the opportunity here to generate higher net income than these two competitors if they can keep their costs low.
- Kroger Re-brands, Expands Organic Food Lines (prweb.com)
- Safeway: Numerous Challenges Suggest Avoidance Is The Best Strategy (seekingalpha.com)
- Safeway Shares Drop on Weak Forecast (dailyfinance.com)