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Investors tout consumer staples as the most recession-resistant industry because, after all, it's hard to live without those products. And nowhere are these can't-do-without items more on display than in supermarkets.

But Ratings' quantitative-evaluation model identifies the pair of supermarket chains in the accompanying table as consumer staples retailers whose shares should be avoided.

The model gives a "sell" rating to

Winn-Dixie Stores



Great Atlantic & Pacific Tea

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, based on their overall grades of "D" on a scale ranging from A-plus to E-minus. Ratings' marks are determined by an objective measurement of a company's valuation metrics, current financial situation and analysts' consensus expectations of future growth.

Analysts who track Winn-Dixie anticipate that its earnings per share of 24 cents for fiscal 2008, which ended in June, will fall to 19 cents for the current fiscal year and tumble further to 7 cents in 2010. That leaves Winn-Dixie priced at a lofty multiple of 47.5 times this year's estimated earnings and a stratospheric 129 times next year's.

Winn-Dixie, which emerged from bankruptcy in November 2006, has tumbled from more than $30 a share in 2007 to its current level in the $9 range. The firm operates more than 500 food-retailing stores in the southeastern U.S.

Great Atlantic & Pacific Tea, which earned $1.37 a share last year, is expected to report a loss of 28 cents a share for fiscal 2009 and 37 cents in 2010. Its fiscal year ends Feb. 28.

The firm operates about 450 food stores under the A&P brand and other names. It completed the acquisition of the Pathmark supermarket chain in December 2007. Its stock, which fluctuated in the $5 to $10 range in 2003-2004, advanced to more than $30 in 2006-2007 before retreating to $4 to $8 in recent months.

Richard Widows is a senior financial analyst for Ratings. Prior to joining, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.