The supermarket wars are on in earnest, and the share prices of Woolworths Limited (ASX:WOW), Wesfarmers Ltd (ASX:WES) and Metcash Limited (ASX:MTS) are feeling the brunt of the competition.
Not only are Costco and Aldi trying to reinvent the grocery landscape, but Aldi-clone Lidl and the big daddy of them all, Amazon.com are coming. And they aren't taking prisoners.
I have to say, there are plenty of potential winners in this game. Maybe Amazon reinvents supermarket shopping. Maybe Costco does as well here as in the US and Canada. Maybe Aldi continues to take bites out of the big guys.
But I have a pretty good idea who the most likely loser is.
Poor old Metcash.
When your business relies on moving boxes — Metcash is a wholesaler, and its IGA stores are franchised — and the number of boxes you move comes under threat, you're in a tough spot. And with price competition showing no signs of abating, the small independent grocery stores simply can't compete, other than some individual shops that offer convenience, local monopoly or both.
I don't claim to know who'll win this supermarket war… but I wouldn't buy Metcash shares for love nor money.
Speaking of money, if it's dividends you're after, here's one company you should have on your watchlist.
