INVESTMENT RECOMMENDATIONS AND COMMERCIAL REALITY IN SCOTTISH GROCERYRETAILING

Since 1990 the grocery market in Scotland has been restructured and re -organised. November 1990 saw the opening of the first Shoprite hard d iscount grocery store in Scotland. A discount re-orientation and price war had begun. Shoprite expanded (too) rapidly, got into difficulties and have had to sell their stores to Kwik Save. Wm Low, after being a dversely affected by the changed competitive structure, have been take n over by Tesco. These events illustrate the increased competitive nat ure of the Scottish grocery marker. Both developments came as a surpri se however to dedicated followers of brokers' reports on these retail companies, despite the suposedly close relationships between brokers a nd retail. This study looks at brokers' reports on Shoprite and Wm Low in the lead up to their take-overs in 1994, and points (admittedly wi th hindsight) to a divergence in investment recommendations and commer cial reality.