Back to top

Image: Bigstock

E-commerce Drives Grocery Sales in January: 4 Stocks to Buy

Read MoreHide Full Article

The pandemic has left the retail sector battered but a few sections have managed to perform well such as grocery. Given that grocery is one of the necessities, sales have been on the rise. In fact, spending for grocery and beverage stores saw an impressive rise in January, thanks to the new round of financial aid package that saw people spending more freely.

Moreover, every time coronavirus fears escalate, people start stockpiling.This hasbeen drivinggrocery sales over the past few months. That said, the pandemic has changed the shopping habits of millions, with most people buying things online. Thus, grocers with a strong online arm may benefit from the situation.

Grocery Sales Rise in January

According to the latest report released by the Census Bureau on Feb 17, spending at grocery and beverage stores jumped an impressive 2.4% in January. On a year-over-year basis, sales jumped 11.6%, with people stockpiling aggressively due to fears of the deadly coronavirus.

Overall, retail sales increased 5.3% in January. According to a NPD Group report in, the gains witnessed in January follow strong spending in November and December. In the holiday season, retail sales jumped 8% on a year-over-year basis to $781.1 billion.

The solid performance comes just a month after Congress approved a fiscal stimulus totaling $900 billion. The new round of stimulus comes on top of a whopping $2.2 trillion fiscal aid package approved in 2020 following the COVID-19 outbreak.

Online Grocery Sales Poised to Grow

E-commerce has been playing an integral part since the COVID-19 outbreak. Most people are shopping online, which has been helping drive not only grocery sales but the overall retail sector. Moreover, the coronavirus fears are far from over as a result of which people have been time and again stockpiling on necessary goods, which is helping grocers, earn more revenues.

Also, grocers with a strong curbside pickup arm stand to benefit given that people are hesitating to step out of their house. According to eMarketer, online grocery sales are projected to reach 147.4 million by 2023.

Our Choices

E-commerce has come as a savior during the pandemic and has also been helping the retail sector. Moreover, the fresh round of stimulus will give people more purchasing power, which they are likely to use in buying grocery given that it’s one of the essential commodities. This thus makes for an opportune time to invest in grocery companies that have a strong online arm.

Target Corporation (TGT - Free Report) has evolved from just being a pure brick & mortar retailer to an omni-channel entity. The company has been investing in technologies, improving websites and mobile apps, and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players.

The company’s expected earnings growth rate for the current year is 43.2%. The Zacks Consensus Estimate for current-year earnings has improved 5.2% over the past 60 days. Target carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Hain Celestial Group, Inc. (HAIN - Free Report) offers a wide range of popular better-for-you groceries, snacks and tea. 

The company’s expected earnings growth rate for the current year is 63.1%. The Zacks Consensus Estimate for current-year earnings has improved 7.9% over the past 60 days. The Hain Celestial Group holds a Zacks Rank #2.

Celsius Holdings Inc. (CELH - Free Report) specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements.

The company’s expected earnings growth rate for next year is 16.7%. The Zacks Consensus Estimate for current-year earnings has improved 20% over the past 60 days. Celsius Holdings carries a Zacks Rank #2.

MEDIFAST INC (MED - Free Report) has become a remarkable direct-selling company in the industry. The company is also known for its leading health and wellness community — OPTAVIA — which provides Lifelong Transformation, One Healthy Habit at a Time lifestyle solutions. 

The company’s expected earnings growth rate for thenext year is 53.7%. The company’s shares have gained 28% in the past three months. Medifast has a Zacks Rank #1.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>