Consumer goods analyst Austin Smith discusses whether traditional grocery retailers can survive. Traditional retailers like Safeway, Kroger, and SUPERVALU have been undercut by broad-line grocery stores like Wal-Mart. These huge retailers, along with pharmacies like Walgreen or Rite Aid, sell groceries at cost to drive traffic into the stores. Traditional groceries look like they are in for a rough ride, but retailers with a competitive advantage like Whole Foods and Costco still look promising.
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Austin Smith owns shares of SUPERVALU INC. Isaac Pino has no positions in the stocks mentioned above. The Motley Fool owns shares of Costco Wholesale, SUPERVALU INC., and Whole Foods Market. Motley Fool newsletter services recommend Costco Wholesale and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.