Proprietary Data Insights
Top Mega/Large Cap Grocery Store Aisle Stock Searches This Month
Source: St. Louis Fed
By grocery store aisle stocks, we mean the consumer defensive names who sell the staples you take from the supermarket (or other retailer) to your kitchen cupboards, counters, and tables.
With the exception of tobacco purveyor Altria Group (MO), 10 of the 11 consumer defensive companies generating the most interest among investors in The Juice’s proprietary Trackstar database come into play somewhere on that journey from point A to point B for large swaths of the population.
Maybe you buy produce and other kitchen items at Walmart (WMT), Target (TGT), or Costco (COST). Or maybe you opt for a large supermarket chain, such as Trackstar #8 Kroger (KR). If you’re pinching pennies or just like saving a buck, you might even work a deep discount store, such as #10 Dollar Tree (DLTR) into the mix. You might shop at a convenience store like #7 Walgreens (WBA) for some kitchen or, more likely, personal hygiene products.
No matter how you go about it, you probably purchase a product from the remaining consumer defensive (consumer staples!) companies generating interest in Trackstar.
Such as actual Coca-Cola or maybe some Smart Water or Topo Chico from #3 Coca-Cola (KO). If you’re a Pepsi person, it might be actual Pepsi or Ruffles or Doritos or Gatorade or Quaker Oats oatmeal from #11 Pepsico (PEP). There’s a good chance you have some Bounty paper towels or Dawn dishwashing liquid produced by #9 Procter & Gamble (PG).
If you’re not much of a meat eater, #6 Beyond Meat (BYND) could enter the picture.
However you go about it, one thing’s for certain, as evidenced by that chart showing the unabated increase in the cost of food at home. Inflation has only moderated because of decreasing energy prices, particularly at the pump. Stocking your kitchen shelves continues to get more expensive with each inflation report.
To that end, we can learn a lot about this economy and get an investment insight or two by checking in with some of the consumer staples stocks generating the most interest among investors. And this is just what we’ll do.
Scroll with us, as we grab a couple names from those 11 Trackstar stocks and look at what they’ve had to say most recently about their respective businesses.
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Top 11 Most Searched Grocery Store Aisle Stocks This Month
First thing’s first.
The names highlighted in our Trackstar database trigger significant interest because they’re blue chips.
Of the 11, six are dividend aristocrats, meaning they have increased their dividend payment, every year, for 25 consecutive years or more.
If you were starting a portfolio, these six stocks could look good as your first six picks.
Aside from the dividend, these six and their Trackstar counterparts generate interest because they sell and/or produce products people need in their lives as much, if not more, than they want them in their lives. No matter the economy, you’re going to shop somewhere. And you’re going to buy stuff for your kitchen. Even with the food at home index skyrocketing, it amounts to the cost of doing the business of life.
Generally speaking, when these stocks tumble, they present buying opportunities because they have, over the years, performed so well as long-term investments.
On The Economy
You can learn so much about the consumer economy from these companies.
For example, in mid-August, Walmart held an earnings call. If nothing else, it was shroud in uncertainty. The general message – we’re optimistic, but really have to wait and see what happens with inflation before we have a confident handle on where the consumer is headed.
However, the objective data Walmart has – beyond the headline numbers – tells a story. For example, from the company’s CFO:
As the year has progressed, we’ve seen more pronounced consumer shifts and trade down activity. As an example, instead of deli meats at higher price points, customers are increasing purchases of hot dogs as well as canned tuna or chicken. Private brand penetration has also inflected higher, and in food categories specifically, the private brand growth rate doubled compared to Q1 levels.
Consumers trading down. Buying less expensive products, including private label brands. This echoes what we’ve heard in recent months from other retailers who deal in groceries and related items. The Juice highlighted this trend last month when we looked at Sprouts Farmers Market’s (SFM) earnings call.
Then there’s this nugget from Pepsico Q2/2022 earnings call that says so much about why it’s a blue chip investment and economic barometer:
I think we actually are best positioned as just about anybody in the industry to do that for a couple of reasons. One, our portfolio is so broad – anywhere from premium products like Frappuccino to value products like Santitas, and because our supply chain, our distribution network enables us to shape the inventory in store by store. So, for stores that need more value products, we can weight the inventory in that store towards that. For stores that premium products are going to turn better, we obviously have the ability to adjust inventory.
A broad portfolio and the ability to literally tweak inventory on the basis of an individual store’s needs.
Such great stuff.
The Bottom Line: We love turning to Trackstar to see the stocks generating the most investor interest. From there, we can glean investment insights as well as learn/reinforce a thing or two among the economy, especially with this class of companies. It’s a fun and informative approach that benefits us as investors, armchair economists (unless you’re an actual economist!), and everyday consumers.
Over the next few weeks, we’ll grab a few more consumer-centric names – like we did with Walmart and Pepsico today – and see what they’re saying that can help us be better investors, economists, and consumers.
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