Price Check: Discount Grocery Stores Set to Largely Outperform Their Conventional Peers Worldwide in 2023
DBRS Morningstar released a commentary titled “Price Check: Discount Grocery Stores Set to Largely Outperform Their Conventional Peers Worldwide in 2023.” While the global food retail sector as a whole is generally more resistant to macroeconomic challenges compared with other industries, we expect discount grocery stores to fare better than their conventional peers in 2023. That said, we anticipate volume growth trends to gradually return to historic levels as economic conditions normalize and believe any resulting structural changes will not be material enough to be the primary driver of any near-term rating actions within our portfolio.“Although discount grocery stores' volumes were mostly outpaced by conventional stores during the Coronavirus Disease (COVID-19) pandemic, given the changes in consumer behaviour following surging levels of inflation and rising interest rates, we expect the reverse during this continued period of economic distress,” notes Moritz Steinbauer, Vice President, Team Lead Diversified Industries.
Costco Wholesale and its subsidiaries are principally engaged in the operation of membership warehouses based on the concept of providing its members low prices on a selection of nationally branded and private-label products. The company's merchandise are: food and sundries, which include dry foods, packaged foods, and groceries, snack foods, candy, alcoholic and nonalcoholic beverages, and cleaning supplies; hardlines, which include appliances, electronics, health and beauty aids, hardware, and garden and patio; fresh food, which include meat, produce, deli, and bakery; softlines, which include apparel and small appliances; and ancillary, which include gas stations and pharmacy businesses.
Walmart is engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Argentina, Canada, Central America, Chile, China, India, Japan, Mexico and the U.K. The company's operations are conducted in three reportable segments: Walmart U.S., which is a mass merchandiser of consumer products, operating under the Walmart and Walmart Neighborhood Market brands, as well as walmart.com, jet.com and other eCommerce brands; Walmart International, which includes various formats divided into retail, wholesale and other categories; and Sam's Club, which is a membership-only warehouse club that also operates samsclub.com.
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