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.
10. Dingdong (Cayman) Limited (NYSE:DDL)
Number of Hedge Fund Holders: 16
Dingdong (Cayman) Limited (NYSE:DDL) is a China-based e-commerce company that delivers groceries and other daily life necessities directly to users. Its offerings include fresh produce, meat, seafood, and other items. Its frontline fulfillment grid comprises over 950 frontline fulfillment stations across 29 Chinese cities. The grid is also supported by around 40 regional processing centers that package, sort, label, and store raw products before fulfillment.
The company reported a 28.3% year-over-year growth in gross merchandise value (GMV) for fiscal Q3 2024, with all its regions experiencing positive growth. Fiscal Q3 2024 marked the third consecutive quarter of GMV growth, and set a new quarterly high for the company. Its net income grew by 6,240.6% year-over-year, marking record highs in Dingdong (Cayman) Limited’s (NYSE:DDL) history.
As of fiscal Q3 2024, the company has attained non-GAAP profitability for the eighth consecutive quarter, GAAP profitability for the third consecutive quarter, and revenue growth on a year-over-year basis for three straight quarters. Its advanced supply chain capabilities and data algorithms enable it to achieve significant operational efficiency, with fulfillment expenses as a percentage of revenue decreasing to 21.4% from 23.2%. Overall, Dingdong (Cayman) Limited (NYSE:DDL) appears well-positioned to maintain the current growth trajectory in China’s fresh grocery e-commerce market.
9. Ingles Markets, Incorporated (NASDAQ:IMKTA)
Number of Hedge Fund Holders: 20
Ingles Markets, Incorporated (NASDAQ:IMKTA) is a grocer in six southeastern states. It operates neighborhood shopping centers in conjunction with its supermarket operations and also owns a fluid dairy facility. Its product offerings include grocery products, produce, meat and dairy products, frozen foods, and other non-food products. The company operates around 198 supermarkets, 115 in-store pharmacies, and 108 fuel stations.
The company has solid debt management and capital discipline policies, bolstering its appeal as a long-term investment. Its debt-to-equity ratio dropped from over 200% to 67% in the past decade and with over $403 million in debt repayments, it is constructing a solid financial base. Its share buybacks have supported shareholder value, as seen in the 2021 buyback that slashed shares by 6.3% and drove the stock price from $37 to $100. Since Ingles Markets, Incorporated’s (NASDAQ:IMKTA) cash reserves are at an all-time high, it offers a high potential for further buybacks or dividend adjustments to reward shareholders.
The company ceased earnings calls in 2018 and is focused on long-term growth without considering Wall Street pressures. Ingles Markets, Incorporated (NASDAQ:IMKTA) takes the ninth spot on our list of the 12 best grocery store stocks to buy now.
8. Arko Corp. (NASDAQ:ARKO)
Number of Hedge Fund Holders: 21
Arko Corp. (NASDAQ:ARKO) is an independent convenience store operator that functions in four segments: Retail, Wholesale, Fleet Fueling, and GPMP. The company operates its stores under a brand portfolio of more than 25 regional brands, including Admiral, Apple Market, Flash Market, Dixie Mart, 1-Stop, Handy Mart, Jetz, Jiffi Stop, and more.
It reported a merchandise margin rate of 32.8% for fiscal Q3 2024, compared to 31.7% for the prior year period. Arko Corp. (NASDAQ:ARKO) is focusing on operational excellence, strengthening store-level performance, and improving customer offerings. Management is confident in its position to manage near-term macroeconomic challenges and its long-term potential for sustained growth through improvements in its operations and investments in its stores.
As part of its developing transformation plan and channel optimization strategy, Arko Corp. (NASDAQ:ARKO) converted 51 retail stores to dealer sites in fiscal Q3 2024 and expects to convert another ~100 stores by the end of fiscal Q4 2024. Together with the initial 51 stores, this conversion is anticipated to amount to a cumulative annualized benefit to the combined wholesale and retail segments. The company ranks eighth on our list.
7. Grocery Outlet Holding Corp. (NASDAQ:GO)
Number of Hedge Fund Holders: 33
Grocery Outlet Holding Corp. (NASDAQ:GO) is a retailer that sells fresh food products and name-brand consumables through an elaborate network of independently operated stores. Its product offerings include fresh meat and seafood, staples, refrigerated and frozen food, staples, and other items.
While Grocery Outlet Holding Corp. (NASDAQ:GO) reported positive results, it is experiencing challenges brought about by system conversions. To combat these challenges, it is focusing on executing well on its fundamentals and has made significant progress in implementation.
It reported a 10.4% net sales growth in fiscal Q3 2024, reaching $1.11 billion. Comparable store sales also grew by 1.2%, driven by a 2.0% increase in the number of transactions. Grocery Outlet Holding Corp. (NASDAQ:GO) opened 5 new stores in the quarter, ending fiscal Q3 2024 with 529 stores across 16 states. These positive results reflect the strong positioning of the company’s consumer offerings and the growth of its share of consumer non-discretionary spending. The company ranks seventh on our list.
6. Sprouts Farmers Market, Inc. (NASDAQ:SFM)
Number of Hedge Fund Holders: 47
Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a specialty natural and organic food retailer that offers a specialty grocery experience. Its products are made of organic, plant-based, gluten-free, and similar lifestyle-friendly ingredients. The company operates around 407 stores in 23 states.
Sprouts Farmers Market, Inc. (NASDAQ:SFM) reported a 59.2% growth in net income in fiscal Q4 2024, going to $79.6 million from $50 million registered in the same period last year. Net sales rose 17.5% year-over-year to $1.996 billion. Similarly, net income for the full year grew by 47% to $380 million, while revenues grew by 12.9% to $7.7 billion. This strong performance was broad-based and balanced across channels, geographies, baskets, and traffic.
The company’s e-commerce business is also growing, reporting a 37% sales growth in fiscal Q4 2024 and representing 14.5% of its total sales for the quarter. Apart from these solid results, the company expanded its footprint to Wyoming, marking its 24th state in the US. Sprouts Farmers Market, Inc. (NASDAQ:SFM) also opened 33 new stores, which performed robustly and surpassed the previous year’s performance.
5. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 56
Target Corporation (NYSE:TGT) is a retail giant that operates more than 2,000 discount department stores and hypermarkets across the US and Canada. It serves its customers, referred to as guests, an array of items, including everyday essentials, fashionables, differentiated merchandise at discounted prices, and general merchandise and food. Its merchandise categories span apparel and accessories, food and beverages, home furnishing and decor, and others.
In January, the company announced that it is focusing on its commitment to wellness, with plans to introduce more than 2,000 new items across multiple categories, including more than 600 Target exclusives. Furthermore, Target Corporation (NYSE:TGT) is expanding its men’s wellness range with new offerings, such as Dr. Squatch body care, additional products from Dwayne Johnson’s Papatui men’s care line, and a new men’s fragrance from the vegan brand Fin’ery.
In the first nine months of 2024, the company generated $4.07 billion in operating cash flow and held $3.4 billion in cash and cash equivalents by the end of the quarter. Target Corporation (NYSE:TGT) boasts a solid dividend history and a strong financial position, which enabled the company to return $516 million to shareholders through dividends.
4. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 60
The Kroger Co. (NYSE:KR) is a food and drug retailer that operates supermarkets, fulfillment centers, and multi-department stores. Its brand portfolio includes Smart Way, Big K, Heritage Farm, Simple Truth Organic, and Simple Truth. The company operates approximately 2,722 supermarkets, 2,257 pharmacies, and 1,665 fuel centers in 35 US states and the District of Columbia.
The company has an established digital presence that it has attained by investing in automation, creating distribution channels in delivery and pickup, building out its own properties, and enhancing personalization over nearly a decade. The Kroger Co. (NYSE:KR) is benefiting from this presence, as its digital sales increased by 11% in the fiscal Q3 2024. Delivery sales were up by 18%, primarily driven by customer fulfillment centers.
The Kroger Co. (NYSE:KR) has other plans to improve its standing as well. It is focusing on enhancing customer loyalty, expanding its digital footprint, and, engaging in competitive pricing to drive sales and strengthen profit margins. The company’s performance reflects that it can continue to be profitable under various market circumstances, ranking it fourth on our list of the 12 best grocery store stocks to buy now.
3. Albertsons Companies, Inc. (NYSE:ACI)
Number of Hedge Fund Holders: 70
Albertsons Companies, Inc. (NYSE:ACI) is a US-based food and drug retailer. It has over 2,269 stores across 34 states and the District of Columbia under 20 banners, including Star Market, Shaw’s, Albertsons, Kings Food Markets, United Supermarkets, Haggen, Kings Food Markets, Acme, Carrs, and more.
The company’s fiscal Q3 2024 revenue reached $18.8 billion, up 1.2% year-over-year but below analyst estimates. Albertsons Companies, Inc. (NYSE:ACI) is thus focusing on key strategies to drive growth. It is investing in pharmacy and health, which has driven sales penetration to over 11% of total annual revenue. It is also investing in its e-commerce business, which it runs out of its stores so its inventory is close to its customers. Its ecommerce investments have driven sales penetration to over 7% of grocery revenue. This growth has been supported by new developments in the company’s mobile app and improved quality, speed, and convenience of DriveUp & Go and in-home delivery.
Albertsons Companies, Inc. (NYSE:ACI) plans to continue investing to deliver consistent omni-execution for brand campaigns across its digital and physical assets. It also expects to build new partnerships to add digital inventory and capabilities to its platform. The company takes the third spot on our list of the 12 best grocery store stocks to buy now.
2. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 95
Costco Wholesale Corporation (NASDAQ:COST) operates membership-only big box warehouse club stores and is one of the most popular department stores in the US. It offers an extensive collection to its customers, including a range of grocery items.
Costco Wholesale Corporation’s (NASDAQ:COST) retail approach lends it a competitive market position. The company is attracting a growing number of loyal shoppers worldwide by offering membership-based pricing and discounts on bulk items. In addition, its stock has surged by nearly 36% in the past 12 months.
Costco Wholesale Corporation (NASDAQ:COST) generated revenue of $62 billion in fiscal Q1 2025, marking a 7.5% increase compared to the same quarter last year. It also ended the quarter with 77.4 million paid household members, reflecting a 7.6% growth compared to last year and highlighting its continued popularity.
To continue this demand, the company is expanding its operations, opening new stores and consolidating its presence in 47 US states. It attained its target of opening 30 new warehouses in fiscal 2024. It is also expanding its presence internationally and has plans to take on 12 of its 29 planned openings outside the US.
1. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 115
Walmart Inc. (NYSE:WMT) is an omnichannel retailer that operates retail and wholesale stores and clubs, e-commerce websites, and mobile applications. It offers an elaborate array of items, ranging from general merchandise and electronics to food, groceries, and more.
The company reported sales growth of 5.2% in fiscal Q4 2025, along with a 9.4% adjusted operating income growth in constant currency. Walmart Inc. (NYSE:WMT) is continually gaining market share across income levels and countries. Unit volumes and transaction counts were up across all its markets in the first three quarters of the year, reflecting its healthy top line. The company’s prices are low, and it is becoming increasingly convenient, resulting in its growing popularity.
In February, Walmart Inc. (NYSE:WMT) Canada announced plans to spend $4.51 billion on new stores, reflecting supply-chain expansion. As part of the initiative, the company is planning to open dozens of stores across the country, starting with opening five supercenters in Ontario and Alberta by 2027, two of which are set to open this year.
Overall, WMT ranks first among the 12 best grocery store stocks to buy now. While we acknowledge the potential of grocery store stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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