us supermarkets & grocery stores industry...

Supermarkets & Grocery Stores Industry Report 2018 Sources:Washington, D.C. Mexico City Monterrey

US Supermarkets & Grocery Stores Industry Report

July 2018

Supermarkets & Grocery Stores Industry Report 2018 Sources:

US Grocery Stores & Supermarkets Industry Overview

• The supermarkets and grocery stores industry represents the largest food retail channel in the United States. Establishments

in this industry offer a wide array of food products, including fresh and prepared meats, poultry and seafood, canned and

frozen foods, fresh fruits and vegetables and various dairy product

• Stores are ranked according to size (e.g. megamarkets, hypermarkets, supermarkets, clubs, warehouses, convenience stores,

and other)

• In 2017, total sales of the industry reached US$1,116 billion, with a CAGR (2012-2017) of 2.7%

• Number of outlets (as of 2017) of 385,100 units, showing a CAGR (2012-2017) of 1.4%

• Selling space (as of 2017) of 228.5 million m², showing a CAGR (2012-2017) of 1.2%

• By 2022, total sales of the industry are expected to reach US$1,142 billion with a CAGR (2017-2022) of 0.5%

• Number of outlets will increase to 403,500 units, a total growth (2017 / 2022) of 4.8%

• From 2017 to 2022, grocery discounters are expected to grow the most in sales and outlets, with 9.1% and 7.5% respectively

• Key players in the industry include, Wal-Mart Inc with a market share (retail value) of 25.6%, Kroger Co with a 9%, Albertsons

Cos Inc with a 5% and Ahold Delhaize with a 3.7%. Other competitors include, Publix Super Markets Inc, HE Butt Grocery Co,

Meijer Inc, Wakefern Food Corp, among others

• By number of outlets in 2017, 7-Eleven led with 9,242 units, Circle K (Couche-Tard) with 5,758 and Walmart Supercenter with

3,560

• By selling space in 2017, Walmart Supercenter led with 58,735 million m², Kroger with 5,397 million m² and Publix with 5,117

million m²

• Industry is experimenting intensifying retail competition from alternative options, as consumer migration online has grocers

racing to increase their online presence and moving toward blended models (e.g. click and collect); meanwhile online giants

are, venturing to traditional physical stores (e.g. Amazon buying Whole Foods)

• Discount stores (e.g. Lidl and Aldi) account for 27% of the grocery stores recently built or in progress, being the main threat to

traditional grocers forcing them to drop prices

Sales by Category

IBISWorld, Euromonitor, DB Hoovers

Industry Sales

Supermarkets47%

Hypermarkets28%

Forecourt Retailers

10%

Food/Drink/Tobacco Specialists

7%

Independent Small Grocers

3%

Others5%

1,116

1,120

1,124

1,129

1,135

1,142

2017 2018 2019 2020 2021 2022

Historical Forecast

US$ Billion


Top 3 US Players by Market Share

Other Representative US Companies by Market Share

Companies’ reports, Euromonitor

Company Share: 25.6%

• 4,672 Units in the US

• 2017 Annual sales in the US of US$308 billion,

• Sales growth CAGR of 3.28% (2014-2017)

Company Share: 9%


• 2017 Annual sales in the US of US$123 billion


• Company banners: Kroger, Ralphs, Fry’s Food

Stores, King Scoopers, Food 4 Less, Smith’s, among

others

Company Share: 5%


• 2017 Annual sales in the US of US$60 billion


• Company banners: Albertsons, Safeway, Vons,

Amigos, Jewel Osco, Acme, United, Tom Thumb,

among others.

3.7%

1.4%

3.1% 1.9% 1.5%

1.4%

1.3%

1.3%

1.2% 1% 0.9%0.9%


Price

2018-07-20 2014 2015 2016 2017EV /

EBITDA

EV /

Revenue

Walmart Inc. USA $88.06 $505,491 6.5% $259,851 $301,347 8.5x 7.8x 7.8x 8.6x(Invalid End Date)9.2x 0.6x

Costco Wholesale Corporation USA $218.69 $139,465 4.3% $95,905 $95,657 12.5x 13.9x 14.0x 14.0x 16.1x 0.7x

Wal-Mart de México, S.A.B. de C.V. MEX $2.92 $32,207 9.8% $51,074 $50,046 13.8x 14.7x 15.2x 14.0x 16.7x 1.6x

The Kroger Co. USA $28.14 $123,907 4.3% $22,418 $35,999 7.6x 8.9x 7.8x 6.6x 6.7x 0.3x

Aeon Co., Ltd. JPN $19.93 $77,482 5.6% $16,736 $35,457 6.6x 8.2x 7.8x 7.8x 8.4x 0.5x

Koninklijke Ahold Delhaize N.V. NLD $25.18 $76,325 6.5% $29,647 $32,531 5.4x 7.4x 8.7x 7.6x 6.8x 0.4x

Woolworths Group Limited AUS $22.91 $44,339 6.3% $30,013 $31,108 10.1x 8.1x 8.8x 10.5x 11.8x 0.7x

Carrefour SA FRA $15.82 $96,651 4.5% $12,299 $25,584 7.6x 8.6x 7.6x 7.4x 6.0x 0.3x

Dairy Farm Int. Holdings Limited HKG $9.28 $11,289 5.1% $12,552 $13,220 16.6x 13.7x 13.0x 15.2x NR 1.2x

J Sainsbury plc GBR $4.27 $39,472 4.1% $9,394 $11,893 5.0x 5.1x 5.4x 6.6x 7.7x 0.3x

Sun Art Retail Group Limited HKG $1.28 $15,725 7.1% $12,178 $10,761 10.8x 7.3x 6.2x 7.9x 9.7x 0.7x

Wm Morrison Supermarkets PLC GBR $3.35 $24,372 4.7% $7,877 $9,193 6.5x 10.7x 11.7x 9.2x 8.7x 0.4x

Shoprite Holdings Limited RSA $15.42 $11,761 7.2% $8,552 $8,659 11.3x 10.7x 10.4x 11.3x 11.0x 0.8x

Public Joint Stock Company Magnit RUS $67.74 $19,593 7.4% $6,903 $8,600 14.3x 10.6x 9.5x 10.2x 6.6x 0.5x

Companhia Brasileira de Distribuição BRA $20.51 $13,745 6.3% $5,464 $7,250 7.6x 5.5x 7.1x 10.5x 9.9x 0.6x

NR: Not Relevant Mean 9.7x 0.6x

Median 8.9x 0.6x

Average EV / EBITDA 2018-07-20

Company CountryRevenue

US$M

EBITDA

Margin

Market Cap.

US$M

Enterprise

Value

Price

2018-07-20 2014 2015 2016 2017EV /

EBITDA

EV /

Revenue

Walmart Inc. AR $88.06 $505,491 6.5% $259,851 $301,347 8.5x 7.8x 7.8x 8.6x 9.2x 0.6x

Costco Wholesale Corporation WA $218.69 $139,465 4.3% $95,905 $95,657 12.5x 13.9x 14.0x 14.0x 16.1x 0.7x

The Kroger Co. OH $28.14 $123,907 4.3% $22,418 $35,999 7.6x 8.9x 7.8x 6.6x 6.7x 0.3x

BJ's Wholesale Club Holdings, Inc. MA $25.91 $12,869 3.8% $3,418 $6,075 0.0x 0.0x 0.0x 0.0x 12.4x 0.5x

Casey's General Stores, Inc. IA $109.67 $7,472 6.5% $4,013 $5,306 9.3x 10.1x 9.7x 9.9x 10.9x 0.7x

Sprouts Farmers Market, Inc. AZ $22.15 $4,821 7.0% $2,920 $3,402 24.2x 17.2x 12.1x 11.2x 10.1x 0.7x

SUPERVALU INC. MN $20.61 $14,157 3.1% $796 $2,664 6.5x 6.3x 4.9x 4.6x 5.9x 0.2x

PriceSmart, Inc. CA $80.40 $3,122 5.9% $2,444 $2,411(Invalid Identifier) 17.1x 14.5x 13.6x 13.9x 13.0x 0.8x

Ingles Markets, Incorporated NC $29.55 $4,072 5.9% $599 $1,481 7.0x 8.0x 7.1x 6.8x 6.1x 0.4x

Weis Markets, Inc. PA $52.63 $3,491 4.8% $1,416 $1,322 6.8x 7.1x 7.3x 7.8x 8.0x 0.4x

Smart & Final Stores, Inc. CA $5.55 $4,620 3.4% $413 $1,045 10.4x 10.8x 10.4x 9.9x 6.6x 0.2x

Village Super Market, Inc. NJ $29.69 $1,609 3.8% $427 $396 5.8x 6.1x 5.7x 5.0x 6.5x 0.2x

Natural Grocers by Vitamin Cottage,

Inc.CO $14.65 $812 5.2% $328 $377 16.9x 12.7x 7.5x 5.6x 8.9x 0.5x

iFresh Inc. NY $4.17 $137 0.2% $60 $76 0.0x 0.0x 0.0x 57.9x NR 0.6x

NR: Not Relevant Mean 9.3x 0.5x

Median 8.9x 0.5x

Average EV / EBITDA 2018-07-20Enterprise

ValueCompany State

Revenue

US$M

EBITDA

Margin

Market Cap.

US$M

Comparable Public Companies – USA

The following section presents financial information of publicly traded companies in the food retail industry in the world and in the US

Supermarkets & Grocery Stores Industry – Current Market Situation

Capital IQ

Comparable Public Companies – Global


Supermarkets & Grocery Stores Industry – US Transactions

Capital IQ

May-18 BJ's Wholesale Club in Fort Myers, Florida FL A wholesale club in Florida Cole Credit Property Trust V, Inc. $26 - -

Mar-18 Fiesta Mart, L.L.C. TX Hispanic supermarkets Bodega Latina Corporation $265 - -

Mar-18 21 Farm Fresh Stores of SUPERVALU Inc. USA Grocery storesThe Kroger Co.; Harris Teeter, Inc.; Food

Lion, LLC$43 - -

Oct-17 Honey Farms, Inc. MA Convenience stores Global Partners LP $36 - -

Oct-17 Liquor Stores USA South Inc. KY Liquor stores Blue Equity, LLC $29 - -

Jun-17 Whole Foods Market, Inc. TX Natural and organic foods supermarket Amazon.com, Inc. $14,621 10.3x 0.9x

Aug-16 Delek US' Retail Assets USA Food retail fleets Copec Inc. $529 - -

May-16 Joe Caputo & Sons, Inc. IL Grocery stores Piggly Wiggly Midwest, LLC $32 - -

Apr-16Stevenson Ranch Plaza in Los Angeles,

CaliforniaCA A grocery store InvenTrust Properties Corp. $73 - -

Mar-16 The Fresh Market, Inc. NC Specialty grocery retailerApollo Global Management, LLC; Apollo

Management VIII, L.P.$1,391 7.0x 0.7x

Nov-15 Roundy's, Inc. WI Retail grocery stores The Kroger Co. $835 7.0x 0.2x

Oct-15 Haggen, Inc., Eight California Stores CA Food retail stores Gelson's Markets, Inc. $36 - -

Sep-15The Great Atlantic & Pacific Tea Company, Inc.,

12 A&P and Pathmark StoresCA Supermarkets Wakefern Food Corp. $40 - -

Jul-15 25 Stores in New York NY SupermarketsThe Stop & Shop Supermarket Company

LLC$146 - -

Jul-15 Susser Holdings Corporation TX Convenience stores Sunoco LP $1,924 - -

Jun-15 One Stop Inc. WV Chain of convenience stores Domino's Pizza Group plc $45 - -

Jun-1577 Convenience Stores & Retail Motor Fuel

StationsUSA Convenience stores GTY-Pacific Leasing, LLC $215 - -

Feb-15 VPS Convenience Store Group, LLC NC Chain of convenience stores GPM Petroleum LP $60 - -

Dec-14 The Pantry, Inc. NC Convenience storesLGT Capital Partners AG; Crown Co-

investment Opportunities plc; entre otros$1,808 7.8x 0.3x

Dec-14 Convenience stores and other assets USA Convenience stores GPM Petroleum LP $43 - -

Aug-14 Nice N Easy Grocery Shoppes, Inc. NY A chain of grocery stores

Lehigh Gas Partners LP

(nka:CrossAmerica Partners LP); CST

Brands, Inc.

$65 - -

Mar-14 Safeway Inc. CA Food and drug retailer AB Acquisition LLC $12,391 4.8x 0.2x

Apr-14 Susser Holdings Corporation TX Convenience stores Energy Transfer Partners, L.P. $2,534 16.0x 0.4x

Feb-14 Mi Pueblo San Jose, Inc. (nka:Mi Pueblo LLC) CA Network of supermarketsVictory Park Capital Advisors, LLC; Cha

Cha Enterprises, LLC$46 - -

Jan-14Pro's Ranch Markets, Inc. (nka:CNG Ranch,

LLC)AZ Network of supermarkets

Cardenas Markets, Inc.; Northgate

González Markets, Inc.$55 - -

Dec-13 Arden Group, Inc. CA Operates supermarkets TPG Capital, L.P.; TPG Partners VI, L.P. $390 - -

Dec-13 Safeway, Inc., 11 Dominick's Stores IL Grocery stores Roundy's, Inc. $36 3.0x 0.1x

Nov-13 Girkin Development, LLC KY Convenience stores TravelCenters of America LLC $68 - -

Nov-13Portfolio of 7-Eleven Properties in Northeastern

OhioOH Convenience stores Inland Private Capital Corporation $29 - -

Sep-13Piggly Wiggly Carolina Company, Inc., 22

Piggly Wiggly StoresSC Food retail stores Bi-Lo Holdings, LLC $35 - -

NR: Not relevant Mean 8.0x 0.4x

Median 7.0x 0.3x

DescriptionDate Target State BuyerSize

(US$M)

EV/

EBITDA

EV/

Revenue


Regional Representative Transactions – Supermarkets & Grocery Stores Industry

Deal SummaryTarget Buyer

On March 06, 2014, AB Acquisition LLC, subsidiary of Albertsons Companies LLC

based in Idaho, announced the acquisition of Safeway Inc, a Californian food retail

company, for US$2,181 million, representing implied multiples of 4.8x (EBITDA) and

0.2x (revenue)

On June 16, 2017, Amazon.com, Inc., a company focused on e-commerce and cloud

computing services based in Washington, announced the acquisition of Whole Foods

Market, Inc., a Texan organic food supermarket chain, for US$14,620 million,

representing implied multiples of 10.3x (EBITDA) and 0.9x (revenue)

On April 29, 2018, “El Super”, Texan supermarkerts and subsidiary of Grupo

Comercial Chedraui, a Mexican supermarket chain, announced the acquisition of

Fiesta Mart, L.L.C., a Texan food retailer, for US$265 million to ACON Investments,

L.L.C., representing implied multiples of 6.6x (EBITDA) and 0.2x (revenue)

On April 28, 2014, Energy Transfer Partners, L.P., a Texan oil and gas

transportation company, announced the acquisition of Susser Holdings

Corporation, operates convenience stores in Texas, for US$2,533 million,

representing implied multiples of 16.0x(EBITDA) and 0.4x Revenue

On July 15, 2015, Sunoco LP, a Texan retailer of motor fuels, announced the

acquisition of Susser Holdings Corporation, operates convenience stores in Texas,

for US$1,923 million to Energy Transfer Partners

Capital IQ, Mergermarket

On December 20, 2013, TPG Capital L.P., a Texan venture capital firm, announced

the acquisition of Arden Group, Inc, a Californian food retailer doing business as

“Gelson's”, for US$389 million

On April 20, 2016, InvenTrust Properties Corp., a real estate company based in

Illinois, announced the acquisition of Stevenson Ranch Plaza., a Californian grocery

store, for US$72 million

Stevenson

Ranch Plaza

On January 31, 2014, Cardenas Markets, Inc., a chain of supermarkets in California

and Arizona, announced the acquisition of Pro's Ranch Markets, Inc., a network of

supermarkets in Arizona, for US$55 million

On February 20, 2014, Cha Cha Enterprises, LLC, a real estate company based in

California, announced the acquisition of Mi Pueblo San Jose, LLC, a network of

supermarkets in California, for US$46 million


#1 Representative Transaction – Supermarkets & Grocery Stores Industry

Amazon.com, Inc. announced the acquisition of Whole

Foods Market, Inc. for US$14,620 million

Buyer:

Target:

Company Value:

US$14,620 M

• On June 16, 2017, Amazon.com, Inc., a company focused on e-commerce and cloud

computing services, announced the acquisition of Whole Foods Market, Inc., an organic

supermarket chain based in Texas, for US$14,620 million, representing implied multiples

of 10.3x (EBITDA) and 0.9x (revenue)

• It is the largest acquisition to date made by Amazon and the most important merger in

food retail

• Whole Foods generates annual revenues of US$16,000 million and has establishments

in the United States, Canada and the United Kingdom

• The Whole Foods shares appreciated by 29% while Amazon shares appreciated by 3%

on the day of the announcement of the acquisition

AB Acquisition LLC, announced the acquisition of Safeway

Inc., for US$12,391 million

• On March 06, 2014, AB Acquisition LLC, subsidiary of Albertsons Companies LLC,

announced the acquisition of Safeway Inc, a Californian food retail company, for

US$2,181 million, representing implied multiples of 4.8x (EBITDA) and 0.2x (revenue)

• The merger will create a diversified network that includes 2,230 stores, 27 distribution

facilities and 19 manufacturing plants with over 250,000 employees across 34 states and

the District of Columbia

• Safeway Inc., by the time of the transaction, operated 1,335 stores in 20 states and

the D.C., 13 distribution centers and 20 manufacturing plants, and employs

approximately 138,000 employees.

Buyer:

Target:

#2 Representative Transaction – Supermarkets & Grocery Stores Industry

Amazon paid US$42 per share

in cash to Whole Foods

Multiple

EV/EBITDA:

10.3x

Company Value:

US$12,391 M

US Industry size equals to

US$800 billion

As result of the transaction, the

common stock of Safeway is no

longer listed for trading

Multiple

EV/Revenue:

0.2x

Multiple

EV/EBITDA:

4.8x

Multiple

EV/Revenue:

0.9x

The new company is

comprised in 3 regions and 14

retail division

Capital IQ, Safeway, NY Times

REPRESENTATIVE GLOBAL ENGAGEMENTS

Washington, D.C. Mexico City Monterrey

has sold

to

a subsidiary of

has sold

to

and

A division of Carrier Commercial Refrigeration, Inc.

has acquired

has sold the North

American

guarding business of

to

has sold

GE Power Systems

to

Acquisition

Advisory Services

GE Industrial Systems

has acquired

has sold

to

andhas acquired

a wholly owned

subsidiary of

Acquisition

Advisory Services

has sold

Triumph Air Repair &

Triumph Engines

businesses

to

Divestiture &

Brand Valuation

Advisory

Services

Shell Oil Products U.S.

has acquired

has sold

to

Daives Baird Pty Ltda sister company of

has sold the

to

Films Business of

a subsidiary of

has sold its

to

GRACE

Membranes Business

has sold

to

Code Flower Inc.

has acquired

has acquired

from

Rockville Asphalt

Planthas acquired

sold

to

sold

to

KPAC Holdings, Inc.A private investment group

has been acquired by

Private Investment

Fund



Acquisition

Advisory Services

Acquisition

Advisory Services

Strategic

Consulting

Services

Advice on Project

Financing

Acquisition

Advisory Services

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REPRESENTATIVE MEXICAN ENGAGEMENTS


to

Holding company of

merged its

beverage division

with

has merged with

a business of

has partnered with

a subsidiary of

has sold

to

its sanitaryware business

and

a business unit of

has sold

Cosmocel Química

to

intelectiva®

has acquired

KFC Costa Rica

from

sold

to

sold

to

Grupo Galaz, S.A de C.V.

dealers of

has partnered with

workshop and store in

Mexico City from

Acquisition

Advisory

Services

Corporate

Finance

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Services

has formed a partnership in

the casting tools business

between

and

has acquired

has acquired

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has acquired

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merged its

beverage division

with

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Services

has carved out and sold

its concrete pumping

assets in Mexico

has formed a

partnership to market

and develop oil storage

and distribution in

Mexico with

Corporate

Finance

Advisory

Services

Corporate

Finance

Advisory

Services

acquired a 61% stake on

Acquisition

Advisory

Services

Corporate

Finance

Advisory

Services


Established presence in

Monterrey , Mexico

*

*

*

*

**

**

* Multiple engagements

*

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

* *

1999

Founded

2016 2017 2018

Mexico Contact Information

James A. Seale

President

[email protected]

Brett M. Carmel

Senior Managing Director

[email protected]

Felipe Bueno Viesca

Managing Director

[email protected]

Sergio Garcia del Bosque

Managing Director

[email protected]

Adan Sierra

Vice President

[email protected]

Carlos Hernandez

Vice President

[email protected]

Alejandro Montemayor

Associate

[email protected]

Sofia Felix

Business Development

[email protected]

Andres Cardenas

Analyst

[email protected]

Armando Rios

Analyst

[email protected]

Miguel Leal

Junior Analyst

[email protected]

Diego Hernandez

Junior Analyst

[email protected]

Since 1999, Seale & Associates has been the trusted advisor to highly

respected public and private companies from around the world, with a

track record of success in a diverse range of industries. Seale is an elite

boutique global investment banking firm with extensive experience in

mergers and acquisitions (M&A), corporate finance advisory, and

enterprise level strategy consulting. Our experienced team of

professionals are committed to serving clients with excellence and

integrity, while offering innovative ideas and solutions to address

complex dealings. All securities related transactions are cleared through

Seale Capital, Inc., a registered broker dealer and member of FINRA

and SIPC.


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Office Information

Advisor to Leading Companies Worldwide

Please contact us if you would like further information about

M&A trends and/or specific transaction multiples for your

industry.

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