While grocery benefited the past couple of years from the COVID crisis, it also required new investments in safety, cleaning, and technologies for curbside pickup, delivery and micro fulfillment centers. As the country emerges from the pandemic, the low margin industry is faced with a number of challenges – some old and some new. Inflation, particularly in proteins, is at 40-year highs. Supply chain disruptions are causing stockouts and transportation expenses are rising due to fuel prices being at all-time highs, plus driver shortages. Labor shortages are driving up wages. These pressures on profit and liquidity, combined with increasing competition, need for store reinvestment, and changing consumer shopping habits, will continue to contribute to the mounting pressures on food manufacturers, distribution and grocery stores.
Carl Marks Advisors has deep subject matter expertise and credibility in the grocery industry, gained through multiple engagements with various grocery chains, cooperatives and distribution businesses. Our team understands the changing dynamics and regulatory framework of the industry, and how to swiftly and effectively maximize profitability – whether through improved operating procedures, an acquisition, capital raise or divestiture. We have worked with owners, senior management, lenders and other parties to help identify strategic opportunities to reduce costs and maximize value as well as explore the potential for mergers and acquisitions.