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GIS » Topics » We may be unable to maintain our profit margins in the face of a consolidating retail environment.These excerpts taken from the GIS 10-K filed Jul 11, 2008. We
may be unable to maintain our profit margins in the face of a
consolidating retail environment.
The 5 largest customers in our U.S. Retail segment
accounted for 57 percent of its fiscal 2008 net sales,
the 5 largest customers in our International segment accounted
for 26 percent of its net sales for fiscal 2008, and the 5
largest customers in our Bakeries and Foodservice segment
accounted for 39 percent of its net sales for fiscal 2008.
The loss of any large customer for an extended length of time
could adversely affect our sales and profits. There has been
significant worldwide consolidation in the grocery industry in
recent years and we believe that this trend is likely to
continue. As the retail grocery trade continues to consolidate
and mass market retailers become larger, our large retail
customers may seek to use their position to improve their
profitability through improved efficiency, lower pricing,
increased emphasis on generic, private label and other economy
brands, and increased promotional programs. If we are unable to
use our scale, marketing expertise, product innovation,
knowledge of consumers’ needs, and category leadership
positions to respond to these demands, our profitability or
volume growth could be negatively impacted.
We may be unable to maintain our profit margins in the face of a consolidating retail environment. The 5 largest customers in our U.S. Retail segment accounted for 57 percent of its fiscal 2008 net sales, the 5 largest customers in our International segment accounted for 26 percent of its net sales for fiscal 2008, and the 5 largest customers in our Bakeries and Foodservice segment accounted for 39 percent of its net sales for fiscal 2008. The loss of any large customer for an extended length of time could adversely affect our sales and profits. There has been significant worldwide consolidation in the grocery industry in recent years and we believe that this trend is likely to continue. As the retail grocery trade continues to consolidate and mass market retailers become larger, our large retail customers may seek to use their position to improve their profitability through improved efficiency, lower pricing, increased emphasis on generic, private label and other economy brands, and increased promotional programs. If we are unable to use our scale, marketing expertise, product innovation, knowledge of consumers’ needs, and category leadership positions to respond to these demands, our profitability or volume growth could be negatively impacted. | EXCERPTS ON THIS PAGE:
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