Why supermarket stocks are getting squeezed

Sun, Jan 16th 2011, 06:36 PM

By DAVID K RANDALL

AP Business Writer

NEW YORK (AP) -- Orange juice isn't the only thing at your supermarket that's been squeezed.

Rising food prices mean grocery store chains must absorb extra costs on items like meat, seafood, and produce, or they try to pass them along to customers But many of those consumers are unemployed or have less money to spend, even on essentials. For now, the big chains are mostly choosing to absorb. As a result, profits are falling, and so are their stocks, making then one of the few dim lights in the market in 2011.

On Tuesday, Supervalu was the first of the grocers to report quarterly results, and the numbers for its fiscal third quarter were ominous ...

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