Update Jan. 22: Ingles stock closed at $42.69 on Thursday, up $2.59 from the previous day’s close.
Original post Jan. 21: The price of Asheville-based grocery chain Ingles Markets dropped almost 16 percent on Wednesday, the second biggest decline on the Nasdaq market on the day at nearly 16 percent.
Supermarketnews.com reported Wednesday that Ingles stock increased nearly 45 percent on heavy trading volume “since filing its 10-K annual report with federal securities regulators in mid-December. The report, which covered the fiscal year ending Sept. 27, disclosed that the company had purchased 2.5 million shares of its own stock from its family holders during the fiscal fourth quarter at an average price of $26 a share. Stock since then climbed by more than 80%.”
Supermarketnews.com reported that there was no word from the company that there was any news triggering the rally or the sell-off. It added:
Some investors have speculated as to the possibility Ingles was the target of takeover interest from a competitor such as Publix or Kroger, or a private-equity buyout or event focused on unleashing its real estate value, but SN has been unable to verify those possibilities. Ingles reported modest fourth-quarter sales growth and a 13.1% increase in net earnings, citing improved customer sentiment.
On Jan. 5, supermarketnews.com reported that Ingles Markets stock hit its highest price in 25 years as a public company, closing at at $40.90 a share, which exceeding a previous high of $40.84 reached in 2007. Trading volume was about five times its typical pace. More:
Ingles has been the subject of some speculation among analysts and industry observers, who note that the chain’s holdings include an attractive real estate portfolio including most of its 202 supermarkets and many of the shopping centers in which they are located. Speculation over the future of the company was raised following the death of founder and CEO Robert P. Ingle in 2011. His son, Robert “Bobby” Ingle II, has served as CEO since then.
Ingle’s Markets is in the process of constructing two new stores in Buncombe County. First, store #31, Smokey Park Highway, will be relocating to its new store built between its existing location and Lowe’s. Second, the new Enka store on Sand Hill Road near Smokey park Highway, store number not yet known, should be opening in the spring or summer.
As Publix adds more stores throughout North Carolina and speculation rose two weeks ago Kroger could be in position to acquire another chain like Bi-Lo Holdings, one wonders if Ingle’s Markets will be active not only in western North Carolina, but upstate South Carolina.
Ingle’s Markets may be active on the stock market, but the chain has been stagnant in growth. Kroger and Publix are adding and opening stores in North Carolina and South Carolina.
After shopping at Publix for years, the impendent level of customer service from the majority of the cashiers doing 8’s at Ingles will either radically improve or the best days of Ingles are over.
Until the last few years, they had an almost virtual monopoly on the local grocery scene. Monopolies are almost never good for the shopper.
Competition is good, however. Maybe they will have to lower their prices and upgrade some of their old worn-out stores now. Also, they may have to pay their employees better wages, as they can always find work at another grocery that might pay more.
but CAN they compete with HT, Publix, TraderJoes, EarthFare, Wholefoods ??? much more competition for Ingles than ever before.
The grocery landscape in the western North Carolina and upstate South Carolina regions has changed. Specialty grocers are Earth Fare, The Fresh Market, Trader Joe’s and Whole Foods Market. Discount grocers are Aldi and Ingle’s Sav-Mor stores. Walmart uses its Supercenter stores as hypermarkets, its Sam’s Club stores as wholesale clubs, and its Neighborhood Market stores as supermarkets or free standing drug store/dollar store/convenience store combination stores. Supermarkets are Ingle’s, Bi-Lo, Publix, Harris Teeter and Food Lion.
One thing that could be hurting Ingle’s is going for larger stores up to 80,000 square feet in size. Harris Teeter and Publix can provide the necessities of food and pharmacy in stores 50,000 square feet or less. Ingle’s has smaller stores are doing very well with food, pharmacy, fuel and Starbucks (i.e. store #205, Landrum, South Carolina). Several stores built or expanded nearly 20 years ago are receiving these updates.
Two other chains beside Ingle’s have been the subject of speculation and activity this week. Last weekend, speculation began that Kroger plans to acquire Bi-Lo Holdings, which consists of Bi-Lo, Harvey’s and Winn Dixie. Bi-Lo Holdings just announced Ian McLeod as its new president and chief executive officer. Kroger owns Harris Teeter.
These short-term swings are inconsequential. Since last April, Ingles has shown almost a 75% gain. It’s a solid stock, with a steady dividend. Not sure why Ashvegas thinks this is news. The family which controls the corporation is not going to let this business deteriorate.