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4 Grocery Stocks to Boost Your Portfolio on Soaring Sales
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Consumers have cut down on spending over the past year as higher prices are pinching their pockets. This has seen the retail sector struggle the most. Higher borrowing costs owing to the Federal Reserve’s aggressive interest rate hike stance to combat sky-high inflation have made people spend cautiously.
However, they can’t do away with necessities, which has seen a substantial rise in grocery sales. Also, groceries belong to the consumer staples sector, which is typically defensive in nature. Given this situation, it would be ideal to invest in grocery stocks like The Kraft Heinz Company (KHC - Free Report) , Lamb Weston Holdings, Inc. (LW - Free Report) , Freshpet, Inc. (FRPT - Free Report) andVital Farms, Inc. (VITL - Free Report) .
Online Grocery Sales Increase
According to the latest Brick Meets Click/Mercatus Grocery Shopping Survey report, online grocery sales totaled $8.2 billion in October, increasing 5% year over year. Although average order value (AOV) somewhat declined in October, a solid jump in the monthly active user (MAU) base drove sales.
Pickup gained its MAU base the most, increasing 6%, while delivery rose 2%.
On a year-over-year basis, the Mass MAU base increased a solid 29% and Grocery’s MAU base increased 6% in October.
In October, the proportion of customers purchasing groceries online from both Grocery and Mass across the month hit a record high, surging 680 basis points compared to the previous year. This increase indicates that more than 34% of Grocery's MAU base also engaged in online grocery shopping with a Mass retailer.
The Consumer Price Index (CPI) rose 3.2% in October on a year-over-year basis, lower than September’s rate of 3.7%. Month over month, CPI remained unchanged in October and came in below economists’ expectations of a rise of 3.3%.
The Federal Reserve has hiked interest rates by 525 basis points since March 2022 to take its benchmark policy rate in the range of 5.25-5.5%. This has seen inflation declining sharply over the past year and a half, which made the central bank keep interest rates unchanged in its last two FOMC meetings.
However, the minutes of the November FOMC meeting show that Fed officials continue to maintain a hawkish stance as inflation is still above their 2% target, which may compel them to continue with their monetary tightening campaign.
Given this situation, investing in defensive stocks like consumer staples would be a safe bet. Grocery stocks belong to the consumer staples sector and investors looking for gains may consider these stocks.
Our Choices
Given this situation, it would be wise to invest in these four food and grocery stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Kraft Heinz Company is one of the largest consumer packaged food and beverage companies in North America. KHC manufactures and markets food and beverage products like condiments and sauces, cheese, as well as dairy, meals, meats, refreshment beverages, coffee, and other grocery products.
The Kraft Heinz Company’s expected earnings growth rate for the current year is 6.5%. The Zacks Consensus Estimate for its current-year earnings has improved 2.4% over the past 60 days. Presently, KHC has a Zacks Rank #2.
Lamb Weston Holdings, Inc. is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. LW, along with its joint venture allies, is the top frozen potato products supplier in North America, while it also operates internationally, with a robust and growing presence in emerging markets.
Lamb Weston’s expected earnings growth rate for the current year is 24.8%. The Zacks Consensus Estimate for the current-year earnings has improved 11% over the past 60 days. LW currently sports a Zacks Rank #1.
Freshpet, Inc. is a pet food company. FRPT manufactures and markets natural fresh foods, refrigerated meals, and treats for dogs and cats in the United States and Canada. Freshpet provides meat-based recipes, such as chicken, beef, lamb and salmon; fruits and vegetables, such as carrots, peas and leafy green vegetables, and high-fiber grains, such as brown rice, oats and barley.
Freshpet’s expected earnings growth rate for the current year is 27.1%. The Zacks Consensus Estimate for the current-year earnings has improved 7.8% over the past 60 days. FRPT presently carries a Zacks Rank #2.
Vital Farms, Inc. offers a range of produced pasture-raised foods. VITL’s product includes shell eggs, butter, hard-boiled eggs, ghee and liquid whole eggs.
Vital Farms’expected earnings growth rate for the current year is 1,667%. The Zacks Consensus Estimate for the current-year earnings has improved 26.2% over the past 60 days. VITL presently has a Zacks Rank #2.
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4 Grocery Stocks to Boost Your Portfolio on Soaring Sales
Consumers have cut down on spending over the past year as higher prices are pinching their pockets. This has seen the retail sector struggle the most. Higher borrowing costs owing to the Federal Reserve’s aggressive interest rate hike stance to combat sky-high inflation have made people spend cautiously.
However, they can’t do away with necessities, which has seen a substantial rise in grocery sales. Also, groceries belong to the consumer staples sector, which is typically defensive in nature. Given this situation, it would be ideal to invest in grocery stocks like The Kraft Heinz Company (KHC - Free Report) , Lamb Weston Holdings, Inc. (LW - Free Report) , Freshpet, Inc. (FRPT - Free Report) andVital Farms, Inc. (VITL - Free Report) .
Online Grocery Sales Increase
According to the latest Brick Meets Click/Mercatus Grocery Shopping Survey report, online grocery sales totaled $8.2 billion in October, increasing 5% year over year. Although average order value (AOV) somewhat declined in October, a solid jump in the monthly active user (MAU) base drove sales.
Pickup gained its MAU base the most, increasing 6%, while delivery rose 2%.
On a year-over-year basis, the Mass MAU base increased a solid 29% and Grocery’s MAU base increased 6% in October.
In October, the proportion of customers purchasing groceries online from both Grocery and Mass across the month hit a record high, surging 680 basis points compared to the previous year. This increase indicates that more than 34% of Grocery's MAU base also engaged in online grocery shopping with a Mass retailer.
The Consumer Price Index (CPI) rose 3.2% in October on a year-over-year basis, lower than September’s rate of 3.7%. Month over month, CPI remained unchanged in October and came in below economists’ expectations of a rise of 3.3%.
The Federal Reserve has hiked interest rates by 525 basis points since March 2022 to take its benchmark policy rate in the range of 5.25-5.5%. This has seen inflation declining sharply over the past year and a half, which made the central bank keep interest rates unchanged in its last two FOMC meetings.
However, the minutes of the November FOMC meeting show that Fed officials continue to maintain a hawkish stance as inflation is still above their 2% target, which may compel them to continue with their monetary tightening campaign.
Given this situation, investing in defensive stocks like consumer staples would be a safe bet. Grocery stocks belong to the consumer staples sector and investors looking for gains may consider these stocks.
Our Choices
Given this situation, it would be wise to invest in these four food and grocery stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Kraft Heinz Company is one of the largest consumer packaged food and beverage companies in North America. KHC manufactures and markets food and beverage products like condiments and sauces, cheese, as well as dairy, meals, meats, refreshment beverages, coffee, and other grocery products.
The Kraft Heinz Company’s expected earnings growth rate for the current year is 6.5%. The Zacks Consensus Estimate for its current-year earnings has improved 2.4% over the past 60 days. Presently, KHC has a Zacks Rank #2.
Lamb Weston Holdings, Inc. is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. LW, along with its joint venture allies, is the top frozen potato products supplier in North America, while it also operates internationally, with a robust and growing presence in emerging markets.
Lamb Weston’s expected earnings growth rate for the current year is 24.8%. The Zacks Consensus Estimate for the current-year earnings has improved 11% over the past 60 days. LW currently sports a Zacks Rank #1.
Freshpet, Inc. is a pet food company. FRPT manufactures and markets natural fresh foods, refrigerated meals, and treats for dogs and cats in the United States and Canada. Freshpet provides meat-based recipes, such as chicken, beef, lamb and salmon; fruits and vegetables, such as carrots, peas and leafy green vegetables, and high-fiber grains, such as brown rice, oats and barley.
Freshpet’s expected earnings growth rate for the current year is 27.1%. The Zacks Consensus Estimate for the current-year earnings has improved 7.8% over the past 60 days. FRPT presently carries a Zacks Rank #2.
Vital Farms, Inc. offers a range of produced pasture-raised foods. VITL’s product includes shell eggs, butter, hard-boiled eggs, ghee and liquid whole eggs.
Vital Farms’expected earnings growth rate for the current year is 1,667%. The Zacks Consensus Estimate for the current-year earnings has improved 26.2% over the past 60 days. VITL presently has a Zacks Rank #2.