Greencore Group plc (LON:GNC) is expected to continue its dominant position in the U.K.’s convenience foods market and has made way into the U.S. through acquisitions that gave them an entry into Starbucks Corporation (SBUX) and 7-Eleven, says Bernard R. Horn Jr., President and Portfolio Manager of Polaris Capital Management, LLC.
“Greencore makes chilled foods, ready-to-eat meals and sandwich products that are primarily sold to large retail grocery stores in the U.K., like Tesco (LON:TSCO), Marks & Spencer’s (LON:MKS) and Asda,” Horn said. “In the U.K., store brand goods comprise a high percentage of grocery store sales; in the U.S., such sales are still much less. Retailers who operate in Europe and the U.S. have sought to convince Greencore to enter the U.S. market to increase the percentage of sales dedicated to store brands.”
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Greencore is one of Horn’s top holdings, as it has relatively lower volatility. The company has made acquisitions over the last couple of years that have given them entry into the U.S. market, and Horn expects continued growth there.
“Greencore made a couple of acquisitions over the last year or two that gave them an entry into Starbucks and 7-Eleven accounts. This is a company that may expect to continue its dominance on the U.K., while growing its business in the U.S.,” Horn said.
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