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Don't Fear Amazon, Say Backers of Revival for European Grocers

  • Too much made of threat to European grocers, investors say
  • Sector fallen too far out of favor: Old Mutual fund manager
Packs of tomatoes sit on display inside a Albert Heijn XL store, operated by Royal Ahold NV, in Leidschendam, Netherlands, on Wednesday, Feb. 18, 2015. Ahold is scheduled to report its full fourth-quarter and full-year results on Feb. 26.

Photographer: Jasper Juinen/Bloomberg

Battered by concerns over the threat posed by Inc. and discount competitors, Europe’s grocery stocks are finding favor with some investors on hopes for a better 2018.

While increasing competition is a worry, changes to buying relationships with suppliers should help ease margin and price pressure going forward, according to Ian Ormiston, a European equity fund manager at Old Mutual Global Investors, whose European Equity (ex-U.K.) Fund holds both Ahold Delhaize NV and Carrefour SA.