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What Lies Behind SFS’s Strong Same-Store Sales?

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SFS displays a strong track record in same-store sales

Smart & Final Stores (SFS) has a strong business model that focuses on both business and household customers. It sells different product types under its Smart & Final and Cash & Carry banners to serve the different customer bases. This helps the company to better cater to customer needs and results in increased traffic as well as customer loyalty.

The stores offer an expanded selection of products ranging from grocery items to party supplies. The company has been successful in winning customers through its everyday low prices and no-membership-fee strategies.

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A combination of several initiatives and the right set of strategies has translated into positive same-store sales for SFS in 24 of the last 25 years. The company achieved same-store sales growth of 4.5% in 2015 after achieving growth of 6.3%, 4.0%, and 5.3%, respectively, in fiscal 2014, 2013, and 2012.

Investors looking for exposure to Smart & Final Stores (SFS) can invest in the SPDR S&P Retail ETF (XRT), which has 0.26% exposure to SFS.

Comparing SFS’s same store sales with supermarket peers and mass merchandisers

Like SFS, Kroger (KR) has been quite consistent in its comparable store sales numbers and has achieved 49 consecutive quarters of positive same-store sales. Kroger’s average comps for the last seven quarters have been 5.2% compared to SFS’s comps of 5.6% during the same period.

Whole Foods Market (WFM), America’s dominant organic food player, has registered negative same-store sales in the last three quarters on account of rising competition in the organic and natural food space. The company’s average same-store sales over the last seven quarters have been just over 1%.

While Costco (COST) has had the best-in-class same-store sales of 5.8% during the last seven quarters, Walmart (WMT) has delivered average sales comps of 1%.

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