Grocery Stocks List

With a well-thought-out grocery store investment strategy, you'll know exactly where to invest your money and how to get the highest returns.

Reasons for Investing in Grocery Stores 

Grocery stores are a great investment opportunity for stability, diversification and steady returns. Here are some reasons why investing in grocery stores can be lucrative.

Low Start-Up Costs

Starting a grocery store business involves lower start-up costs than other retail sectors. Owners can get into the business quickly and begin making some profit right away.

High Profitability 

Grocery stores generally have higher margins than other retail sectors, meaning your investments can offer great returns with less risk.

Customer Loyalty

Customers often return to the same grocery store weekly or monthly, generating consistent revenues.

Recession Resiliency

Grocery stores are historically resilient during economic downturns because shoppers still need to eat, no matter the economic environment.

Varied Products and Services 

Grocery stores offer customers various products and services ranging from fresh produce to prepared foods and deli items, so they (and you) can make money on multiple fronts.

Ways to Invest in Grocery Stores 

Depending on your risk tolerance, financial goals and resources, you can invest in grocery stores in various ways. Here are some of the most popular strategies.

Direct Investment 

Direct investment involves buying a stake in an existing grocery store or opening a new one yourself. This is the most common way to invest and requires more capital upfront, but it offers potentially significant returns over the long term. When considering a direct investment, look at the location, customer demographics, product mix and potential competition.

Analyze its financial performance metrics, such as gross profit margins and operating expenses. For example, we can find this information by looking at Kroger financial statements on MarketBeat and clicking "SEC Filings" to view its annual reports.

Private Equity 

With private equity investments, you invest in a stake in an existing grocery store business with other accredited investors or venture capitalists. By pooling your resources with other investors, this strategy lets you spread the risk with direct investments. Understand the terms and conditions of the deal before investing and look at the expected return on investment (ROI).

Franchising 

Another way to invest in grocery stores is through franchising, which allows one person to own and operate a single store within a larger chain network. This gives you access to well-established brands while offering support from corporate headquarters. While minimal start-up costs are usually involved, the owner must pay royalties on ongoing sales and meet minimum purchase requirements when buying products from corporate headquarters. Additionally, you may need additional capital for renovations or equipment upgrades.

Real Estate

If opening your store isn't feasible, real estate investments can provide another means of entering the industry without taking on too much risk. Acquiring property that houses existing stores can offer steady returns depending on rent agreements and location.

One way to invest in real estate related to grocery stores is through real estate investment trusts (REITs). REITs own and operate properties that generate income, such as retail spaces, including those occupied by grocery stores. By investing in a REIT, you can earn returns on your investment through rental income and appreciation of the property value. For example, Kimco Realty Corp. (NYSE: KIM) is a retail REIT focused on grocery-anchored shopping centers.

Grocery Store Stocks

Grocery store stocks can provide an excellent opportunity to gain exposure to the industry. These investments offer the potential for substantial long-term returns, depending on the company's performance. Choose from large-cap publicly traded grocery stores' stocks, such as The Kroger Co.(NYSE: KR) and Walmart Inc. (NYSE: WMT), or smaller-cap supermarket stocks like SuperValu Inc. (NYSE: SVU) and SpartanNash Co. (SPTN).

Grocery Store Mutual Funds and ETFs 

Investing in mutual funds and exchange-traded funds (ETFs) that specialize in the best grocery stocks can be a great option if you want to invest in the industry but don't have the knowledge or resources to invest in individual stocks. These funds offer exposure to a diversified portfolio of grocery store companies and can be less risky than individual stocks. Look for mutual funds and ETFs with a history of strong performance, low expense ratios and experienced fund managers. 

One such ETF is the SPDR S&P Retail ETF (NYSEARCA: XRT), which includes a mix of large and small-cap retail companies, including grocery stores. 

Example of a Grocery Store Stock 

Kroger is a large-cap grocery store stock with a long history of strong performance. Founded in 1883, Kroger operated over 1,200 stores in over 20 states as of 2023. It's the largest traditional grocery retailer in the United States and reported more than $148 billion in sales for 2022. Over the past few years, Kroger stock performance has been on an upward trend as the company continues to expand its reach and capitalize on new opportunities in digital grocery shopping.

Investing in Kroger is a longer-term play; its short-term performance can be volatile due to market fluctuations and other unpredictable events. However, based on its long track record of growth and positive returns, investments you make now will likely continue to yield positive returns over time.

How to Invest in Grocery Stores 

With some research and careful planning, you can safely and successfully invest in grocery stores and make a profit. Here's how:

Step 1: Choose your investments. 

The first step to investing in grocery stores is to choose the stocks, ETFs or other investments you want to include in your portfolio. You can choose individual stocks of companies involved in the grocery industry, such as Kroger, or ETFs that focus specifically on companies in the industry. For example, clicking on MarketBeat's Retail/Wholesale Stocks list will give you the top 50 largest stocks in that category, including grocery stores.  

Step 2: Research potential investments.

Once you've identified potential investments, research and evaluate them carefully. Look into their financial performance, management team and other factors to ensure they fit your portfolio well. Pay attention to current and emerging trends in the grocery industry. For example, on MarketBeat, you can click on "compare" under Kroger's page, for example, to compare its stock performance to those of its competitors Dollar Tree Inc. (NASDAQ: DLTR) and Target Corporation (NYSE: TGT).

Step 3: Invest with a strategy.

Before investing in any security, you should have a plan for how much money you're willing to invest and when you plan on selling it. It's also important to set realistic expectations of returns. Remember that an investment can always go up or down, so don't expect guaranteed profits. Finally, diversify your portfolio by investing in a mix of different securities so that if one investment doesn't do well, it won't significantly affect your overall returns.

Step 4: Monitor your investment.

Once you've invested in grocery store stocks or ETFs, monitor their performance regularly to know when it might be time to sell or adjust your strategy. Do research on any news related to the companies and industries involved. For example, on Kroger's stock page, you can look under the "KR Stock News Headlines" to monitor news related to Kroger stock, its competitors and its industry.