Analyst Downgrades Pathmark and Opens Rumor Mill

Sep 04, 2002

Pathmark’s share price fell to a two-year low after Gary Giblen, analyst, C.L. King & Associates downgraded his investment rating on the chain from “strong buy” to neutral.

Giblen’s decision to downgrade was based on the tough price competition in the Northeast, a possible strike of pharmacists at Pathmark stores and poor Labor Day weekend sales.

Reuters reports that several industry watchers have speculated that Pathmark could become a takeover target for a big national grocers such as Albertson’s.

Moderator’s Comment: Can Pathmark go it alone or does
it need to be part of a larger supermarket entity? Who are the chain’s most
likely suitors if it is a takeover target?

We’d like to see Pathmark continue to go it alone, since
consolidation never seems to do much for the retailers involved or their consumers.
That said, Pathmark is facing a tough competitive market made more difficult
often by the chain’s own doing.

Based on personal observation, Pathmark’s traffic was
way down in a number of stores over the Labor Day weekend. Sales declines, as
Mr. Giblen believes, can not be attributed solely to consumers staying home
rather than going out in the rain to shop. As one, slightly damp and unidentified
female consumer thought out-loud in our presence, “It’s 9:00 on a Saturday and
you can’t get down the aisles because of boxes. Why don’t they fill the shelves
before the store’s open?”

We just wanted a 20-piece bucket of Jim Donald’s Fried
Chicken. FYI – there wasn’t any prepared for us to buy. [George
Anderson – Moderator

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