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Sysco Corporation Message Board

  • marker9995 marker9995 Dec 9, 2013 3:33 PM Flag

    the real deal with companies like these

    marker9995 • Mar 9, 2012 12:45 PM 4users liked this postsusers disliked this posts4Reply
    The REAL deal with companies like this
    Just want to give my 2 cents on this company and others like them that are traded. Born and bread in the foodservice industry I know the ins and outs and what it takes to make a profit in this business and how difficult it is. You work with small margins because of competition( Afi,U.S foodservice,Chefs warehouse, etc.. and many small independent providers(jobbers). Also you have deal with bad debt(customers going out of business, product going bad and not moving out fast enough, or being stuck with inventory because you bought it high and then it drops and you sell it at a loss.
    When you see a report of sale increases,sometimes its profits but most of the time its because the cost of the product has gone up but you sell with the same formula thus decreasing your profit margin. For example a 30lb box of skirt steaks 2 months ago was $3.00 a lb, now they have gone up to double $6.00 a lb. Due to competition it is difficult to raise your profit margin on the product to equte to a decent mark up of 5-10%.
    Decent profit margins are hard to come by even if you are big or a nation wide company. Thats why samller caompanies are able to compete with a sysco because they have less operating costs. That is why this company is always making acquisitions, to basically eliminate the competition and discourage new blood in the industry. Unfortunately for them it too difficult because many restaurants, delis, bars like to have a more personal connection with their suppliers which sysco cant give because they are too big and their sales people are looking out to try to make a profit from them and nothing else.
    Personally I am shocked that this company and others like it are even able to sell shares
    and try to make people belive they can be a publically traded company, there really is no money being made to justify having investors putting their money in it. Notice how after every earning report the numbers are always "adjusted" later because of higher product cost.-thank you Less

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    • Right on. Put my profits into MCD. They are 80% franchised. It is down today on bad comps. Good time to add a few shares. USF is like the bankrupt airlines operating at a loss and ruining the market for everyone else. Someone else will come in and step into USF's shoes.

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