The Sustainability of Return on Assets Among Sectors in the Food Economy

Using return on assets as a proxy for profitability, this study evaluates the sustainability of profits in the food economy with respect to industry, corporate, and business-specific effects for low- and high-performing firms. The food economy is broken into its four major sectors: food processing, wholesale grocery, retail supermarket, and restaurant. Industry incremental effects are not significantly different between low and high performers except in processing. On average, high performance has been more sustainable than low performance. Corporate and segment sustainability rates were larger for high performers as compared to low performers. Within the retail industry, there is no significant difference between sustainability rates of high and low performers. High performers in the retail industry had significantly greater industry, business-segment, and total-sum sustainability rates than the other three sectors, suggesting the retail sector has important characteristics that merit further research.