Hamish Douglas thinks Woolworths (ASX:WOW) to benefit from increasingly attractive Aussie supermarket industry structure

Speaking at a business lunch in Melbourne Douglas said “I know the [Woolworths] share price is going to be tough over the next 12 months…but do I see a collapse in industry profitability? No, I don't see a collapse. I end up backing industry structures in the long term and this is almost as good as it gets anywhere on the planet…it's a better industry than our banking industry…we have almost the most attractive industry structure in the world in grocery retailing and in our view over the next 10 years it's going to become even more attractive." Looking at the shape of this future structure Douglas foresees that “you will have an industry structure that will have Coles and Woolworths with 80 per cent plus of the market between them … an oligopoly at that end … and a hard discounter [Aldi] with 15 per cent and maybe some rats and mice with Costco." This doesn’t leave much room for Metcash who in Douglas’ opinion may not survive in the medium term. AFR subscribers can read more (VIEW LINK)


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