Market Overview

Citi Forecasts Food Price Inflation For Food Retailers


In a report issued Friday, Citi analyst Alvin C Concepcion shared a look into food retailers and inflation trends in the U.S.

Based on data from the most recent Consumer Price Index (CPI) and Producer Price Index (PPI) data for May, Citi has estimated basket-weighted inflation by product category for three big retailers, The Kroger Co (NYSE: KR), Sprouts Farmers Market Inc (NASDAQ: SFM), and Smart & Final Stores Inc (NYSE: SFS). The firm also calculated “inflation up to two months out for each company based on basket- weighted PPI data which tends to be a leading indicator for CPI,” achieving higher accuracy for the first company.

The analysis has suggested Kroger could see a deceleration in inflation into the June to August quarter. On the other hand, experts have estimated that Sprouts and Smart & Final Stores could witness an acceleration in inflation accelerate in the quarter, “due to differences in timing.” Having said this, the research pointed out that these two companies could see inflation slow down considerably into July.

As per the data available, the Food at Home CPI Index fell 0.7 percent year-over-year in May, versus a 0.3 percent decline in April and an 0.4 percent tumble in the March to May quarter.

Latest Ratings for KR

Oct 2019DowngradesBuyHold
Sep 2019MaintainsBuy
Sep 2019MaintainsNeutral

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Posted-In: Alvin C Concepcion Citi CitigroupAnalyst Color Analyst Ratings


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