Hi Neil66The last 2 years both WOW and WES have been...

Hi Neil66

The last 2 years both WOW and WES have been experiencing moderate to high levels of price deflation in their Food & Liqour businesses. Media have portrayed this as a result of Coles down down campaign but in reality it was largely a creature of seasonal effects in fresh food.

Supermarkets make significantly higher margins in fresh food than in grocery, so this deflation has been a Earnings headwind. I now see this turning, and feel that we will see some low digit inflation in Coles and Woolies numbers over the next 12 months. As i have mentioned before on this thread this is somewhat grain related but i am seeing increases being passed through by large suppliers outside this predominant key raw also.

You started off by suggesting you wanted to short WOW which is significantly removed from merely not buying at this level or holding even though one feels it is currently on the high side of fair value.

Its a powerful business imo and one which is showing more refined execution under O'Brien. Surely there are better shorts out there at the moment maybe a company more debt encumbered, in a weaker market position with a management prone to diluting share holders equity.