In this article, we will look at the 12 Best Grocery Store Stocks to Buy Now.
Is Weak Economic Growth on the Horizon for the US?
CNBC reported that retail sales dropped 0.9% for January after a 0.7% growth in December. This drop was worse than the estimated 0.2% decline estimated by Dow Jones for the month. Prices fell 0.4%, excluding auto, also not in line with the consensus forecast of a 0.3% increase. The “control” sales growth dropped 0.8%. Music, sporting goods, and bookstores declined 4.6% in the month, while online outlets dropped 1.9%. Food and drinking establishments and gas stations both reported a 0.9% increase. According to a Commerce Department report, consumers significantly trimmed their spending in January, which may point towards a potential weakening in economic growth in the coming future.
Consumer spending makes up around two-thirds of all the economic activity in the United States, and the sales numbers reflect a potential weakening in growth for fiscal Q1 2025. Experts believe that a rate cut by the Fed may be as close as June. Inflation is ahead of the Federal Reserve’s 2% goal, with the consumer price index posting a 0.5% gain in January with a 3% annual inflation rate. Robert Frick, corporate economist with Navy Federal Credit Union, said and CNBC reported:
“The drop was dramatic, but several mitigating factors show there’s no cause for alarm. Some of it can be chalked up to bad weather, and some to auto sales tanking in January after an unusual surge in December due to fat dealer incentives. Especially considering December was revised up strongly, the rolling average of consumer spending remains solid.”
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Signs of Stress Reported in Higher-Income US Consumers
Job concerns, inflation, and high interest rates are affecting many American consumers, including the higher-consumer group. People with incomes of $150,000 and more are considered high earners, and this group is showing signs of stress. CNBC reported that they are increasingly facing difficulty making payments on auto loans, credit cards, and mortgages. A new report by VantageScore, a national credit company, was released early to CNBC, which reported that the delinquency rate among this group of high earners is nearing a five-year high, increasing around 130% over the last two years between January 2023 and December 2024. VantageScore CEO Silvio Tavares said the following about the situation in an interview with CNBC:
“We’ve seen significant increases in services cost, like home insurance and auto insurance, and that is hitting the high-income consumer harder than most. That’s what’s driving that delinquency rate”.
Tavares further said that consumers are cautious with credit even when they have a lot of it available by simply choosing not to use it. While credit card balances grew 2.9% year-over-year in December 2024, this rise was in keeping with inflation. Consumers thus have room to breathe before reaching their tipping point. Consumer credit utilization reached 51.6% overall, dropping one percentage point and attaining its second-lowest rate in 2024. Tavares believed that consumers not using their available credit and practicing self-control is a positive sign. Their “credit cautious” outlook for the new year can be a good practice as concerns about unexpected prices and inflation stand even with last year’s solid stock market gains.
With these trends in view, let’s look at the 12 best grocery stocks to buy now.
A bright, colorful display of fresh produce in a grocery store.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 grocery stocks. We then selected the top 12 most popular stocks among elite hedge funds as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best Grocery Store Stocks to Buy Now
12. Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC)
Number of Hedge Fund Holders: 14
Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) is a retailer of natural and organic groceries, dietary supplements, and body care products. The company emphasizes high-quality standards, ensuring its products do not contain artificial colors, flavors, or preservatives. Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) exclusively sells USDA-certified organic produce, pasture-raised dairy products, and free-range eggs. Its product portfolio includes an elaborate range of products for special diets, such as non-dairy, vegetarian, and gluten-free. The company has around 168 stores in 21 states.
Its fiscal Q1 2025 results showed the accelerating growth and continuation of the last two years, including broad-based growth across geographic regions and product categories. Many of its performance metrics are among the highest in grocery retail, with comparable store sales growth remaining balanced between transaction size, transaction counts, and items per basket. The company reported a 15.1% growth in its daily average comparable store sales on a two-year basis.
Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) has also had eight consecutive quarters of positive transaction count comps and four consecutive quarters with a rise in items per basket. Its differential offering is supporting this growth, as customers are increasingly prioritizing products that support health and sustainability, creating tailwinds for its business. The company offers a compelling value proposition with high-quality products at affordable prices, giving it a competitive market advantage.
11. Weis Markets, Inc. (NYSE:WMK)
Number of Hedge Fund Holders: 16
Weis Markets, Inc. (NYSE:WMK) sells food in US states, including groceries, dairy products, fresh produce, meats, frozen foods, deli products, bakery products, general merchandise items, and more. The company owns and operates around 197 retail food stores across the country, many of which also offer online order customer service.
Weis Markets, Inc. (NYSE:WMK) is continually making progress in a post-inflationary environment affecting its year-over-year comparisons. It reported net sales worth $1.19 billion for fiscal Q3 2024, up 2.2% compared to the same quarter last year. Comparable store sales for the quarter also grew 3.0% on an individual year-over-year basis and increased 4.1 percent on a two-year stacked basis, excluding fuel.
This growth was attributed to its popular Weird Rewards loyalty market program that allows consumers to redeem points for discounts on store items. Other growth factors included disciplined store-level efficiencies helping the company balance cost management and customer experience, and investments in its Low, Low Price program of more than 10,000 high-demand products. The program recently added 448 household essential items across eight non-food categories. Weis Markets, Inc. (NYSE:WMK) takes the 11th spot on our list of the 12 best grocery store stocks to buy now.
