Buy These Grocery Stocks. They Were Good Bets Before Coronavirus.

Evie Liu Consumer COST DG DLTR KR WMT BMO Dollar General Dollar General Dollar Tree Dollar Tree Instacart Kroger Kroger Costco Wholesale Costco Whole Walmart Walmart Retail/Wholesale Food Retailing Specialty Retailing Retail Kelly Bania North America United States Financial Performance Earnings Sales Figures Corporate/Industrial News Political/General News Respiratory Tract Diseases Health Medical Conditions Outbreaks/Epidemics Novel Coronaviruses Infectious Diseases Content Types Factiva Filters C&E Industry News Filter COST DG DLTR I/RTS KR M/RTWS N/CNW N/DJN N/ERN N/GEN N/HLT N/NWS N/PFM N/SLS N/WER R/NME R/US WMT Barrons.com Barrons Blogs Wires CODES_REVIEWED Companies Consumer Coronavirus Investing Markets Now Markets Stock Pick Research Reports US Volatility author Evie Liu author|Evie Liu topicid 8574 name Evie Liu extractedtext Evie Liu rank 1 codetype author code evie_liu nameformat surname_first author Evie Liu id Evie Liu barrons_display_subject BARCONSUMER barrons_display_subject|BARCONSUMER codetype BARRONS_DISPLAY_SUBJECT canbedisplaysubject true value BARCONSUMER source MANUAL status modified name Consumer code BARCONSUMER co dolr co|dolr country US symbol DG displayname Dollar General why occur extractedtext Dollar General source FACTIVA seoname dollar_general countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/DG fcode dolr fullextractedtext Dollar General ticker DG confidence 100 subcat com relevance 29 significance passing name Dollar General confidencerange high exchange NYSE exchangeisocode XNYS codetype co code dolr onlinesignificance passing-mention co doltre co|doltre country US symbol DLTR displayname Dollar Tree why occur extractedtext Dollar Tree source FACTIVA seoname dollar_tree countrycode US relevancerange low chartingsymbol STOCK/US/XNAS/DLTR fcode doltre fullextractedtext Dollar Tree ticker DLTR confidence 100 subcat com relevance 22 significance passing name Dollar Tree confidencerange high exchange Nasdaq exchangeisocode XNAS codetype co code doltre onlinesignificance passing-mention co evxsov co|evxsov fullextractedtext Instacart displayname Instacart confidence 100 why occur extractedtext Instacart source FACTIVA subcat com relevance 25 significance passing name Instacart confidencerange high relevancerange low fcode evxsov codetype co code evxsov onlinesignificance passing-mention co krogr co|krogr country US symbol KR displayname Kroger why occur extractedtext Kroger source FACTIVA seoname kroger countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/KR fcode krogr fullextractedtext Kroger ticker KR confidence 100 subcat com relevance 26 significance passing name Kroger confidencerange high exchange NYSE exchangeisocode XNYS codetype co code krogr onlinesignificance passing-mention co pclb co|pclb country US symbol COST displayname Costco Wholesale why occur extractedtext Costco Wholesale source FACTIVA seoname costco_wholesale countrycode US relevancerange low chartingsymbol STOCK/US/XNAS/COST fcode pclb fullextractedtext Costco Wholesale ticker COST confidence 100 subcat com relevance 26 significance passing name Costco Wholesale confidencerange high exchange Nasdaq exchangeisocode XNAS codetype co code pclb onlinesignificance passing-mention co wlmrt co|wlmrt country US symbol WMT displayname Walmart why occur extractedtext Walmart source FACTIVA seoname walmart countrycode US relevancerange low chartingsymbol STOCK/US/XNYS/WMT fcode wlmrt fullextractedtext Walmart ticker WMT confidence 100 subcat com relevance 28 significance passing name Walmart confidencerange high exchange NYSE exchangeisocode XNYS codetype co code wlmrt onlinesignificance passing-mention co banmo co|banmo fullextractedtext BMO country US symbol BMO.T ticker BMO displayname Bank of Montreal confidence 90 extractedtext BMO source FACTIVA subcat com relevance 1 seoname bank_of_montreal countrycode US name BMO confidencerange high exchange NYSE relevancerange verylow exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/BMO fcode banmo codetype co code banmo co WLMRT co|WLMRT symbol WMT country US codetype co displayname Walmart extractedtext Walmart source MANUAL code wmt name Walmart significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/WMT fcode WLMRT status modified onlinesignificance passing-mention co DOLTRE co|DOLTRE symbol DLTR country US codetype co displayname Dollar Tree extractedtext Dollar Tree source MANUAL code dltr name Dollar Tree significance prominent exchange U.S.: Nasdaq exchangeisocode XNAS chartingsymbol STOCK/US/XNAS/DLTR fcode DOLTRE status modified onlinesignificance passing-mention co DOLR co|DOLR symbol DG country US codetype co displayname Dollar General extractedtext Dollar General source MANUAL code dg name Dollar General significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/DG fcode DOLR status modified onlinesignificance passing-mention co KROGR co|KROGR symbol KR country US codetype co displayname Kroger extractedtext Kroger source MANUAL code kr name Kroger significance prominent exchange U.S.: NYSE exchangeisocode XNYS chartingsymbol STOCK/US/XNYS/KR fcode KROGR status modified onlinesignificance passing-mention co PCLB co|PCLB symbol COST country US codetype co displayname Costco Wholesale extractedtext Costco Whole source MANUAL code cost name Costco Whole significance prominent exchange U.S.: Nasdaq exchangeisocode XNAS chartingsymbol STOCK/US/XNAS/COST fcode PCLB status modified onlinesignificance passing-mention company WMT company|WMT name Walmart significance PASSING-MENTION company COST company|COST name Costco Wholesale significance PASSING-MENTION company DG company|DG name Dollar General significance PASSING-MENTION company KR company|KR name Kroger significance PASSING-MENTION company DLTR company|DLTR name Dollar Tree significance PASSING-MENTION djn DG djn|DG significance passing name DG why occur source FACTIVA fcode DG codetype djn code dg onlinesignificance passing-mention djn DLTR djn|DLTR significance passing name DLTR why occur source FACTIVA fcode DLTR codetype djn code dltr onlinesignificance passing-mention djn KR djn|KR significance passing name KR why occur source FACTIVA fcode KR codetype djn code kr onlinesignificance passing-mention djn COST djn|COST significance passing name COST why occur source FACTIVA fcode COST codetype djn code cost onlinesignificance passing-mention djn WMT djn|WMT significance passing name WMT why occur source FACTIVA fcode WMT codetype djn code wmt onlinesignificance passing-mention djn M/RTWS djn|M/RTWS name M/RTWS why lineage source FACTIVA fcode M/RTWS codetype djn code m_rtws djn I/RTS djn|I/RTS name I/RTS why lineage source FACTIVA fcode I/RTS codetype djn code i_rts djn N/NWS djn|N/NWS significance prominent name N/NWS why about source FACTIVA fcode N/NWS codetype djn code n_nws onlinesignificance prominent djn N/SLS djn|N/SLS significance prominent name N/SLS why about source FACTIVA fcode N/SLS codetype djn code n_sls onlinesignificance prominent djn N/PFM djn|N/PFM name N/PFM why lineage source FACTIVA fcode N/PFM codetype djn code n_pfm djn N/ERN djn|N/ERN name N/ERN why lineage source FACTIVA fcode N/ERN codetype djn code n_ern djn N/CNW djn|N/CNW name N/CNW why lineage source FACTIVA fcode N/CNW codetype djn code n_cnw djn N/GEN djn|N/GEN name N/GEN why lineage source FACTIVA fcode N/GEN codetype djn code n_gen djn N/HLT djn|N/HLT name N/HLT why lineage source FACTIVA fcode N/HLT codetype djn code n_hlt djn R/US djn|R/US significance prominent name R/US why about source FACTIVA fcode R/US codetype djn code r_us onlinesignificance prominent djn R/NME djn|R/NME name R/NME why lineage source FACTIVA fcode R/NME codetype djn code r_nme djn N/DJN djn|N/DJN codetype djn value N/DJN source DJN-CONTROL status modified inactivebydefault true name N/DJN code n_djn djn N/WER djn|N/WER codetype djn value N/WER source DJN-CONTROL status modified inactivebydefault true name N/WER code n_wer first_publish_headline Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now first_publish_headline|Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now flow NWREGULAR flow|NWREGULAR codetype FLOW value NWREGULAR source MANUAL status modified name Wires code NWREGULAR flow Barrons.com flow|Barrons.com codetype FLOW value Barrons.com source MANUAL status modified name Barrons.com code online name Online title Product code Barrons.com flow Barrons Blogs flow|Barrons Blogs codetype FLOW value Barrons Blogs title Product source MANUAL status modified name Barrons Blogs code Barrons_Blogs headline Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now headline|Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now in i641 in|i641 significance prominent name Food Retailing why about source FACTIVA fcode i641 codetype in code i641 onlinesignificance prominent in i64 in|i64 name Retail/Wholesale why lineage source FACTIVA fcode i64 codetype in code i64 in i654 in|i654 name Specialty Retailing why lineage source FACTIVA fcode i654 codetype in code i654 in iretail in|iretail name Retail why lineage source FACTIVA fcode iretail codetype in code iretail media media-2 media|media-2 responsive layout wrap softcrop Horizontal imphotoid im-171952 location https://images.barrons.com/im-171952/?size=1.5 media media-1 media|media-1 softcrop Horizontal imphotoid im-171952 location https://images.barrons.com/im-171952/?size=1.5 ns gout ns|gout significance prominent name Outbreaks/Epidemics why about source FACTIVA fcode gout codetype ns code gout onlinesignificance prominent ns gsars ns|gsars significance prominent name Novel Coronaviruses why about source FACTIVA fcode gsars codetype ns code gsars onlinesignificance prominent ns c1513 ns|c1513 significance prominent name Sales Figures why about source FACTIVA fcode c1513 codetype ns code c1513 onlinesignificance prominent ns c15 ns|c15 name Financial Performance why lineage source FACTIVA fcode c15 codetype ns code c15 ns c151 ns|c151 name Earnings why lineage source FACTIVA fcode c151 codetype ns code c151 ns ccat ns|ccat name Corporate/Industrial News why lineage source FACTIVA fcode ccat codetype ns code ccat ns gcat ns|gcat name Political/General News why lineage source FACTIVA fcode gcat codetype ns code gcat ns gcold ns|gcold name Respiratory Tract Diseases why lineage source FACTIVA fcode gcold codetype ns code gcold ns ghea ns|ghea name Health why lineage source FACTIVA fcode ghea codetype ns code ghea ns gmed ns|gmed name Medical Conditions why lineage source FACTIVA fcode gmed codetype ns code gmed ns gspox ns|gspox name Infectious Diseases why lineage source FACTIVA fcode gspox codetype ns code gspox ns ncat ns|ncat name Content Types why lineage source FACTIVA internalsymbol true fcode ncat codetype ns code ncat ns nfact ns|nfact name Factiva Filters why lineage source FACTIVA internalsymbol true fcode nfact codetype ns code nfact ns nfcpin ns|nfcpin name C&E Industry News Filter why lineage source FACTIVA internalsymbol true fcode nfcpin codetype ns code nfcpin nwchain SB503209352039206146753045862985037460771401 nwchain|SB503209352039206146753045862985037460771401 pe 156441331 pe|156441331 lastname Bania displayname Bania, Kelly confidence 92 why occur extractedtext Kelly Bania source FACTIVA relevance 75 significance passing firstname Kelly name Kelly Bania confidencerange high relevancerange medium fcode 156441331 codetype pe code 156441331 nameformat surname_first onlinesignificance passing-mention re usa re|usa significance prominent name United States why about source FACTIVA subcat cntry fcode usa codetype re code usa onlinesignificance prominent re namz re|namz name North America why lineage source FACTIVA subcat snr fcode namz codetype re code namz relay SYND relay|SYND name Syndication source EXPANDER value SYND codetype RELAY code synd status modified statistic CODES_REVIEWED statistic|CODES_REVIEWED name CODES_REVIEWED value CODES_REVIEWED codetype STATISTIC code CODES_REVIEWED subject BARCOMP subject|BARCOMP ruleid BARCOMP codetype SUBJECT value BARCOMP canbedisplaysubject true name Companies title Companies status modified code BARCOMP subject BARVOLAT subject|BARVOLAT ruleid BARVOLAT codetype SUBJECT value BARVOLAT canbedisplaysubject true name Volatility title Volatility status modified code BARVOLAT subject BARMKTS subject|BARMKTS ruleid BARMKTS codetype SUBJECT value BARMKTS selectable true canbedisplaysubject true name Markets title Markets status modified code BARMKTS subject BARUS subject|BARUS ruleid BARUS codetype SUBJECT value BARUS canbedisplaysubject true name US title US status modified code BARUS subject BARCONSUMER subject|BARCONSUMER ruleid BARCONSUMER codetype SUBJECT value BARCONSUMER canbedisplaysubject true name Consumer title Consumer status modified code BARCONSUMER subject BARCORONA subject|BARCORONA ruleid BARCORONA codetype SUBJECT value BARCORONA canbedisplaysubject true name Coronavirus title Coronavirus status modified code BARCORONA subject BARINVST subject|BARINVST ruleid BARINVST codetype SUBJECT value BARINVST canbedisplaysubject true name Investing title Investing status modified code BARINVST subject BARRESE subject|BARRESE ruleid BARRESE codetype SUBJECT value BARRESE canbedisplaybrand true name Research Reports title Research Reports status modified code BARRESE subject BARMKTNOW subject|BARMKTNOW ruleid BARMKTNOW codetype SUBJECT value BARMKTNOW canbedisplaybrand true name Markets Now title Markets Now status modified code BARMKTNOW subject BARPICK subject|BARPICK ruleid BARPICK codetype SUBJECT value BARPICK selectable true canbedisplaybrand true name Stock Pick title Stock Pick status modified code BARPICK wordcount 544 wordcount|544 id facebook id|facebook news_tab_url https://www.barrons.com/articles/buy-these-grocery-stocks-they-were-good-bets-before-coronavirusand-still-are-51585850916 Photograph by Maddie Meyer/Getty Images Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are

Investors may want to stick with grocery stocks that were highly rated for their underlying quality and value before the Covid-19 crisis, BMO Capital Markets analyst Kelly Bania suggests.

Buy These Grocery Stocks. They Were Good Bets Before Coronavirus.

Investors may want to stick with grocery stocks that were highly rated for their underlying quality and value before the Covid-19 crisis, BMO Capital Markets analyst Kelly Bania suggests.

https://www.barrons.com/articles/cvs-hiring-coronavirus-pandemic-sales-furloughed-workers-aetna-hilton-marriott-51584973696 https://www.wsj.com/articles/coronavirus-sparks-hiring-spree-for-nearly-500-000-jobs-at-biggest-retailers-11584984596?mod=hp_lista_pos3 https://www.barrons.com/articles/kroger-stock-is-weathering-coronavirus-outbreak-insider-stock-sales-51585152609 mailto:evie.liu@barrons.com Buy These Grocery Stocks. They Were Good Bets Before Coronavirus—and Still Are Now By Evie Liu Photograph by Maddie Meyer/Getty Images

As grocery stores and essential retailers embrace a burst in sales amid the coronavirus-triggered shopping mania, it may be tempting for investors to chase grocery stocks.

But BMO Capital Markets analyst Kelly Bania suggests investors stick with the names that were highly rated for their underlying quality and value before the Covid-19 crisis. Her recommendations include Walmart (ticker: WMT), Costco Wholesale (COST), and Dollar General (DG)

In the two weeks ending on March 22, U.S. grocery sales surged 83% from the year-ago period, accelerating significantly from the 12% year-over-year growth in the prior week, Bania wrote in a Wednesday note.

The demand spike is not only limited to pandemic epicenters such as New York or California, but rather widespread across the country. States such as Wyoming and Michigan have seen growth just shy of 70% at the low end, while others like Delaware, Louisiana, and Alabama experienced a sharper jump of more than 100% at the high end.

Drug stores have seen a similar trend, with sales increasing 43% in the two-week period ending on March 22. The strong growth came as the sector was seeing a generally negative trend prior to the outbreak.

The surge in demand has driven many grocers and essential retailers into a hiring spree despite the large scale of layoffs and furloughs in other industries. Walmart plans to expand its employee size by 10%, Kroger (KR) by 10%, while Dollar Tree (DLTR) announced about 14% increase in its staff size and Dollar General by 35%.

Demand for grocery delivery has accelerated as well. Daily app downloads for Instacart, Shipt, and Walmart increased 218%, 124%, and 160%, respectively, from mid-February to mid-March, according to app-data analytics firm Apptopia. Instacart also announced plans to hire 300,000 more full-service shoppers in the next three months, an estimated 150% increase from the current level.

Not surprisingly, most major grocery stocks have held up better than the broader market. While the S&P 500 has tumbled 27% since Feb. 19, Kroger shares gained 3.2%, Walmart stock slid just 3%, and Dollar General stock lost 6.5%.

Still, BMO’s Bania said investors should be selective when betting on grocer stocks. Although the unprecedented sales increases seem positive for the group, it also means the companies will have to beat those high bars next year, which will be almost impossible to achieve.

If the economy heads into a recession, weaker demand and mountains of stocked-up goods in consumers’ garage will serve a double-whammy for grocery retailers, dragging on their financial performance in the following quarters.

Write to Evie Liu at evie.liu@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.