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The supermarket that's sending investors running

April 25, 2013: 2:38 PM ET

Safeway's stock dropped 15% Thursday following weak earnings.

Safeway's (SWY) stock looks unsafe at any speed today. It's down more than 15% after the company reported quarterly results.

Supermarkets are notoriously challenging businesses. Take Whole Foods (WFM) out of the equation and nearly every grocery store struggles to generate healthy profit margins. Competition is tight within the industry, and then there's Wal-Mart (WMT). The big box retailer wants to eat every supermarket's lunch, dinner and breakfast.

Safeway's sales dipped during the latest quarter and fell short of what Wall Street analysts were expecting, but the real question is: Why would you shop at Safeway? Think of Whole Foods'  gleaming produce aisle, and then picture how one StockTwits trader describes Safeway's stores.

$SWY Lousy service, lousy house brands and union employees that can't be fired easily..other than that it's great


Safeway: soft sales, down margins reinforce view that many traditional grocers still have no answer to Walmart or Whole Foods $SWY $WMT $WFM

There is one positive indicator from the trading community. It's generally a good thing when insiders buy their stock.

Safeway $SWY insider holdings rising YTD. See holding trends in free INK PDF report (during beta): reg req'd. $SPY

Still, most investors are unconvinced. Safeway and short seem to be somewhat synonymous on StockTwits.

Adding short today $SWY $MMM Long $ANGI $CRUS $CLF

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Maureen Farrell
Maureen Farrell
Staff writer, CNNMoney

Maureen Farrell is a staff writer at CNNMoney and covers Wall Street, banking, mergers and the stock and bond markets. Prior to joining CNNMoney, she covered venture capital and entrepreneurs for Forbes, and mergers and bankruptcy for Mergermarket and Debtwire, both divisions of the Financial Times.

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