The retail sector took a major hit in 2023 as sales declined owing to inflationary pressures. Consumers spent cautiously and cut down on discretionary items. Most of the spending was on basic necessities such as groceries.

In fact, groceries have been boosting overall retail sales and e-commerce played a major role as the majority of Americans shopped online. This saw online sales growing steadily, even during the most difficult times.

Online sales totaled $8.1 billion in November, according to the latest data from Brick Meets Click and Mercatus Grocery Shopping Survey. This was 5.2% higher than in November 2022, when online grocery sales totaled $7.7 billion.

The survey also mentioned that mass merchants surpassed supermarkets during this period to become the primary destination for online grocery shopping. The report says that 42% of U.S. households used mass merchants for both in-store and online grocery shopping.

Moreover, pickup totaled $3.6 billion in online grocery shopping in November, in line with the year-ago figures. Delivery jumped to $3.2 billion in online grocery sales in November, up from $2.9 billion from the year earlier.

Ship-to-home service grew to $1.3 billion in November from $1.2 billion in 2022.

The pandemic saw millions shopping online on fears of contracting the deadly virus. The trend has continued since then. Today, Americans have realized the comfort of shopping online, which is also making sellers shift their focus toward their online arm.

Groceries are necessities, and thus, the segment is considered defensive in nature during the time of price pressures and market volatility. Given this situation, investing in grocery stocks with a strong online presence seems to be a wise decision.

Our Choices

Ingredion Incorporated (INGR Quick QuoteINGR - Free Report) is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.

Ingredion Incorporated’s expected earnings growth rate for the current year is 24.7%. The Zacks Consensus Estimate for the current-year earnings has improved 1.2% over the past 60 days. INGR presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sysco Corporation (SYY Quick QuoteSYY - Free Report) , through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry. SYY provides products and related services to approximately 425,000 customers, including restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers.

Sysco Corporation’s expected earnings growth rate for the current year is 8%. The Zacks Consensus Estimate for the current-year earnings has improved 0.2% over the past 60 days. SYY currently carries a Zacks Rank #2.

Sovos Brands, Inc. is a food company. SOVO’s brand portfolio includes Rao's, a premium line of pasta sauces, pizza sauces, dry pasta, frozen entrees and soups; noosa, a premium yogurt made with whole milk and wildflower honey; Birch Benders, a line of better-for-you pancake and waffle mixes; and Michael Angelo's, a line of premium frozen Italian entrées.

Sovos Brands’ expected earnings growth rate for the current year is 23.3%. The Zacks Consensus Estimate for the current-year earnings has improved 1.4% over the past 60 days. SOVO currently carries a Zacks Rank #2.

Laird Superfood, Inc. (LSF Quick QuoteLSF - Free Report) provides plant-based superfood products. LSF is based in Sisters, OR.

Laird Superfood’sexpected earnings growth rate for the current year is 62.7%. The Zacks Consensus Estimate for the current-year earnings has improved 7.7% over the past 60 days. LSF currently carries a Zacks Rank #2.