The retail sector has been struggling to get back on its feet but one segment that is doing exceeding well is groceries. And it is being aided by e-commerce. Groceries are necessities and have been high on demand ever since the onset of the pandemic.
However, in a bid to maintain social distance and avoid physical contact, most have been shopping online that has seen online grocery sales jumping almost every month. Moreover, the trend is likely to continue given that the pandemic is far from over and people have also finally started realizing the ease of shopping online.
Online Grocery Sales Increase
The online grocery market is booming in the United States. According to the Brick Meets Click/Mercatus Grocery Shopping Survey, online grocery sales in the United States came in at $8.6 billion in August, jumping 4.7% from a year ago.
The combined delivery/pickup grew an impressive 16% to $6.6 billion in August. Monthly active users on average placed 2.73 orders online in August. Online grocery sales have been growing ever since the onset of the pandemic.
Although many people have finally started stepping outside as the economy reopens, they still prefer shopping online given the safety aspects. According to eMarketer, online grocery sales have already crossed $100 billion this year and are poised to grow further. This also proves that despite the economic reopening e-commerce has now become a way of life.
Online Grocery Market to Grow
Although the massive vaccination has given people the confidence to step out, the pandemic is far from over. In fact, fears are already rising due to the fast-spreading Delta variant of coronavirus, which has already seen a jump in hospitalization over the past couple of months.
However, the first wave of the pandemic had already changed the shopping habits of millions. Groceries are necessities and people will continue buying them. Thus, the situation is only likely to drive online grocery sales.
Also, experts believe that e-commerce is here to stay as the focus of grocery players has also shifted to the online business. According to Mercatus, online grocery purchase will account for 21.5% or $250 billion of the total $1.16 trillion grocery market.
Given this situation, investing in grocery stocks with a strong online presence should lead to solid returns going forward. We have picked four such stocks, each currently carrying either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here. Caseys General Stores, Inc. ( CASY Quick Quote CASY - Free Report) offers a variety of food selection (including freshly prepared foods such as pizza, donuts and sandwiches), beverages, tobacco and nicotine products, health and beauty aids, school supplies, housewares, and pet supplies.
The company’s expected earnings growth rate for the current year is 1.1%. The Zacks Consensus Estimate for current-year earnings has improved 10.7% over the past 30 days. Casey’s General Stores has a Zacks Rank #1.
J & J Snack Foods Corp. ( JJSF Quick Quote JJSF - Free Report) is an American manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food-service and retail supermarket industries.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 32.1% over the past 60 days. The company carries a Zacks Rank #1.
Costco Wholesale Corporation ( COST Quick Quote COST - Free Report) sells high volumes of foods and general merchandise (including household products and appliances) at discounted prices through membership warehouses. It is one of the largest warehouse club operators in the United States. The company also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.
The company’s expected earnings growth rate for the current year is 20.5%. The Zacks Consensus Estimate for current-year earnings improved 1.6% over the past 60 days. The company has a Zacks Rank #2.
Celsius Holdings Inc. ( CELH Quick Quote CELH - Free Report) specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements.
The company’s expected earnings growth rate for the current year is 63.6%. The Zacks Consensus Estimate for current-year earnings improved 38.5% over the past 60 days. Celsius Holdings sports a Zacks Rank #1.
SunOpta, Inc. ( STKL Quick Quote STKL - Free Report) is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food, supplements and health and beauty markets.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings improved more than 100% over the past 60 days. SunOpta has a Zacks Rank #2.