retail news in context, analysis with attitude

USA Today has a story about the recent poor stock performance by many grocery operators, noting that "the S&P 500 Food Retail industry group has lost 8% of its value this month, creating a nearly 15% hit for investors this year. The poor performance of grocery store stocks is somewhat of a surprise since they are in what's considered to be a defensive industry, which means business tends to hold up even during times of economic slowness."

The story goes on: "Hardest hit have been the specialty groceries that operate in niches such as in organic food that are getting increasingly encroached upon by larger grocers like Kroger or mass retailers like Costco, says Phil Terpolilli, analyst at Wedbush Securities." Which is why companies like Whole Foods and Fairway - admittedly for different reasons - have been struggling in the public markets.
KC's View:
I normally shy away from stock market stories, since I think it is fairly well established that I'm more interested in Main Street than Wall Street. But I thought this was interesting since Kroger and Costco are identified as stronger performers because they're encroaching on territory formerly dominated by niche companies ... but Costco and Kroger also are companies that, I think it is fair to say, have succeeded on Wall Street precisely because they've done so well focusing on Main Street. Fairway made a Wall Street play that its diminishing returns on Main Street made hard to justify, and one has to wonder lately if Whole Foods has been too focused on Wall Street. To me, the winning formula seems pretty evident...