Chillin' out till it needs to be funded
All we have to say is one must think hard about the retail story and in larger terms the Lifestyle Economy story. But before we go on, you might want to read the good news on Consumer debt and the American Economy (Jobs)
To start at the beginning, It is obvious that the recession was kind on McDonalds ( $MCD) and maybe YUM brands ( $YUM) could have suffered some more but didn’t. Finally now as McDonalds got it in November and groceries are cheaper in the US, their small honeymoon with the markets is over even as same store sales did rise in Europe 2.5% ( To me, that number is still too low, sigh!)
One must then look at the real lifestyle economics’ story. Thanksgiving went by and only Nordstrom performed better than expectations. The great Macys’ efforts with a half a billion in restructuring came to nought
In confectionary markets, Kraft is budgeting hard even with a hostile bid for a hyper-growth story like Cadbury’s and Proctor & Gamble has sold off its coffee Folgers. The pain is showing everywhere. P&G and Unilever are in the midst of tight non growth markets, when worldwide this segment of food retail and other lifestyle will be the one that will outgrow everything else. Margins might improve too but it is too soon to tell.
One last section I must consider right now is whole foods, the green community like Whole Food Markets that grew pretty well till 2007
To recap while everyone knows retail has had a sad sad start to the 21st century with Circuit City, some Office Depot a lot of Macy’s in 2009, Saks and other UK stores like Sainsbury’s , almost everything except Amazon and Walmart..
This is an ideal opportunity for hedge funds to come out and prove their ‘utility’ to the financial markets at large. A new version of Privat e Equity if you will. But Financial stewards that understand the retail pulse and the costs of restructuring. Bronson point’s ;launch could be a god send to Macys Elie and Ellen at Kraft, I am sure Ben and Warren Buffet would agree. Yes, Buffet too.
These Financial stewards are knocking at the doors right now. As usual some of them made money during the recession, but making no bones, simply put it has been a tough time for them too. Investors are touchy and this sector has a very bad report card in Financial skirmishes, whether it be legacy or greens in the diet.
This post is mostly a reuters story soon to make it to major dailies in the print edition as well. Read us at the Advantage zyaada US blogs (O’nomics) The changed headline strikes you just that where it will be in a year
US on Seekingalpha, here