It may not look like it, but a majority of grocery stores have faced extreme challenges throughout the pandemic just to try and keep up the ongoing pressure of stocking items for consumers and increased demand for online orders. As a result, investors have been keeping a watchful eye on grocery store stocks. While profit margins are slim in the supermarket business, the stocks for these stores offer a certain level of downside protection for a well-balanced portfolio.
Albertson’s
The Albertsons (NYSE:ACI) stock made it’s intro last summer and is steadily gaining momentum after a robust third quarter report published this week. Sales increased up to 12.3% and the company’s net income had more than doubled their year over year goal driven by a huge surge of 225% in digital sales.
One of Albertson’s unique aspects is its focus on in-house brands – with over 12,000 SKUs on more than 500 categories which represents the $14 billion business. They also are the first to roll out an automated grocery pickup service in Chicago, making them the first US grocer to test contactless pickup kiosk concept.
Kroger
This grocer (NYSE:KR) is on its way up. Reports from the company state a 51% increase in earnings and effortlessly topped the Wall Street consensus on strength of increased consumer purchases. However, despite the rise in sales, Kroger’s share price had sunk on investor concerns that the sales growth had climaxed. But there is no denying that with the current condition of the global pandemic plus regulations on social distancing, a lot of consumers will be choosing to cook and stay at home. Therefore, need for grocery essentials will never dissipate.
Sprouts
Sprouts (NASDAQ:SFM) may be just a small grocery establishment compared to the two listed above, but because they center on fresh produce of fruits and vegetables, they had earned a place in the most beloved grocery shop this year. This is where the brand focuses, and they get a lot of attention because of the need to consume fresh and healthy food due to the coronavirus. Although stocks may be priced cheap at the moment, but the company offers so much possibilities. Over the next few years, the company management plans to build out its store footprint in a gradual annual pace of 10% especially in areas with higher growth potential which makes absolute business sense given the current economic situation we are in.