EUROPE: Supermarket share prices sluggish
Shares in many European grocers such as Carrefour, Ahold, Metro, Tesco or Sainsbury have underperformed the overall market in the last twelve months. A primary reason for the sluggish share history is the bitter price war raging in many national grocery sectors - notably the UK, Germany, the Netherlands and France. Developments in sales and distribution are also exerting pressure on bricks and mortar retailers who see the Internet as a threat rather than a potential sales channel.Further acquisitions in the European grocery sector could reduce fixed costs and increase retailers' purchasing power, but the consolidation process under way is currently making slower headway than initially predicted. This leads analysts to predict that the share prices of the major grocers will take some time to catch up with the rest of the market.
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