THIS WEEK IN SUPERMARKET HISTORY 2002-04-29

'Slow Synergies'

The food retailing industry's financial outlook for second-half 2000 was drastically different from the outlook reported on the front page of last week's SN. On April 24, 2000, the industry focused on the continued strong economy and issues surrounding merger integrations.

Back before the terrorist attacks and the recession, the Top 10 supermarket chains showed progress in second-half 1999, albeit progress tempered by the unaddressed issues attached to some key mergers.

Integration issues clouded financial assessments for the period as mergers affected the earnings outlook. For the next half, analysts anticipated few drastic changes and fewer integration issues. Since none of the analysts could foresee today's financial climate, one was more concerned with the strong economy, which shifted consumers toward eating out more, than with Wal-Mart.

Today, in a more challenging economy, Wal-Mart seems to be on the front-burner of industry concerns. According to last week's SN, assorted challenges in the second half of 2001 had escalated as a result of Wal-Mart's growth. Wal-Mart was the only top retailer that showed significant gains for that period.