Co. divests itself of 120 convenience stores

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This is a bit off topic, but put questions into my mind. A local company sold off its' grocery stores last year.We wondered at the time ,why ,since they seemed to be profitable. Yesterday the news announced they had sold their 120 convenince stores which also seem very profitable being as they have almost a monopoly in this area.

My husband and I exchanged looks and said "do you think?" So what do you think? Is this a very astute company who thinks it should get of of businesses that may not be able to pump their gas and would be on the list of first places to be looted and not covered by insurance if it is y2k connected?

-- sue (deco100@aol.com), February 03, 1999

Answers

To answer that you need to look at the finances (which will be public only of the buyer or seller are public companies).

It could just be that they didn't really want to be in the convenience store business and someone else did, so paid a tad above the rate for a business of that type.

On the other hand if the sale was at a big discount to the perceived wisdom ...

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), February 03, 1999.


I think Y2K will be a deciding factor in many mergers over the next few years, including fire sales on the apx. 15% of companies expected to have mission critical failures as a result of Y2K. The losers will be small business, as well as the consumers who will have far less market competition to keep prices down. (On the other hand, if it is the foreign markets that fold, maybe American manufacturers and farmer will final be able to get the prices they probably deserve.)

-- Brooks (brooksbie@hotmail.com), February 03, 1999.

We have had two major chain grocery stores close here in the past year. One was due to some kind of lawsuit -- Food Lion... The other was more recent and we don't have a clue why they closed: they've been a prime shopping spot in their location for many years.

On the other hand, suddenly we are seeing several chain store openings... Office Max and new gardening centers...

So, it's hard to figure without the inside details the whys and what fors of any business expansion/contraction.

-- Shelia (shelia@active-stream.com), February 03, 1999.


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