With the rising prevalence of online grocery shopping, increased adoption of technologies like AI and ML, and changing consumer behavior, the grocery market is positioned for robust growth and expansion. Also, these dynamics are presenting new opportunities for the segment and offering greater prospects in the future.
Given the industry tailwinds, it could be wise to invest in fundamentally sound grocery tech stocks The Kroger Co. (KR), Seven & i Holdings Co., Ltd. (SVNDY), and Walmart Inc. (WMT) for solid returns.
Global circumstances in the last half-decade have changed consumer outlook to a higher degree. Grocery shopping has gone online, and more consumers are opting for online purchases instead of going to the stores, resulting in rapidly changing trends in the grocery market.
Also, evolving consumer preferences and advancements in technologies are urging companies to lean towards new and latest innovations for efficiency. In January 2025, the U.S. online grocery market evidenced a strong 16.6% increase in sales, reaching $10 billion compared to the previous year. Ship-to-home sales rose by 9% to $1.60 billion, while Delivery sales were $4.10 billion, up 37% year-over-year.
With this, the global online grocery market is expected to reach around $305.13 billion by 2030, growing at a noteworthy CAGR of 26.8%, driven by changing shopping preferences, e-commerce industry growth, and advances in the grocery market technologies like Artificial Intelligence (AI) and Machine Learning (ML).
Amid this, there are certain companies operating in the grocery market that are actively investing and adopting technology to leverage the ongoing grocery tech trends. Companies are making their services consumers first and enhancing their operations through innovative apps, advanced payment options, robots, and other settings, reshaping how consumers shop for their essentials like food.
With these encouraging trends in mind, let’s delve into the fundamentals of the three Grocery/Big Box Retailers stock picks, beginning with the third choice.
Stock #3: The Kroger Co. (KR)
KR operates as a food and drug retailer. It operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination of food and drug stores provides natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce.
On January 31, 2025, KR’s Board of Directors declared a quarterly dividend of $0.32 per share, which will be paid on March 1, 2025, to shareholders of record as of the close of business on February 14, 2025.
KR pays an annual dividend of $1.28, which translates to a yield of 1.96% at the current share price. Its four-year average dividend yield is 2.01%. Moreover, the company’s dividend payouts have increased at a CAGR of 15.6% over the past three years. Kroger has raised its dividends for 17 consecutive years.
During the third quarter, which ended November 9, 2024, KR posted sales of $33.63 billion, while its adjusted FIFO operating profit came in at $1.02 billion for the same quarter. Also, adjusted net earnings attributable to KR were $719 million or $0.98 per common share, indicating 3% and 3.2% increases from the prior year's quarter, respectively.
Analysts expect KR’s revenue for the second quarter (ending July 2025) to increase marginally year-over-year to $33.97 billion. The company’s EPS is expected to grow 6.5% year-over-year to $0.99 over the same quarter. Also, it surpassed the consensus EPS estimates in all four trailing quarters.
Shares of KR have increased 24.1% over the past six months and 36.4% over the past year to close the last trading session at $65.45.
KR’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
KR has a B grade for Quality and Value. It is ranked #14 out of 35 stocks in the A-rated Grocery/Big Box Retailers industry.
In addition to the POWR Ratings we’ve stated above, we also have KR's ratings for Sentiment, Momentum, Stability, and Growth. Get all KR ratings here.
Stock #2: Seven & i Holdings Co., Ltd. (SVNDY)
Headquartered in Tokyo, Japan, SVNDY operates convenience stores, superstores, department stores, supermarkets, and specialty stores. The company operates in six segments: Domestic Convenience Store operations; Overseas Convenience Store Operations; Superstore Operations; Department and Specialty Store Operations; Financial Services; and Others.
In terms of forward EV/Sales, SVNDY is trading at 0.76x, 51.7% lower than the industry average of 1.57x. Likewise, the stock’s forward EV/EBITDA multiple of 9.18 is 7.3% lower than the industry average of 9.90. Also, its forward Price/Sales of 0.52x is 56.8% lower than the industry average of 1.21x.
During the third quarter that ended November 30, 2024, SVNDY reported the group's total sales of ¥ 4.67 trillion ($30.79 billion), and its operating income was ¥ 128.40 billion ($846.39 million). The company’s net income attributable to owners of parent was ¥ 11.39 billion ($75.06 million), whereas its EPS was ¥ 4.39 for the period, respectively.
Street expects SVNDY’s revenue for the fiscal year (ending February 2025) to increase 5818.7% year-over-year to $78.27 billion. Further, for the first quarter (ending May 2025), the company’s revenue is estimated to grow 9.2% year-over-year to $18.80 billion. Additionally, SVNDY topped the consensus revenue estimates in three of the trailing four quarters.
Over the past six months, SVNDY’s stock has surged 5.1% and 10.6% over the past year to close the last trading session at $15.66.
SVNDY’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Quality, Stability, and Growth. Within the same industry, SVNDY is ranked #13 of 35 stocks.
Click here to access additional ratings of SVNDY for Momentum, Value, and Sentiment.
Stock #1: Walmart Inc. (WMT)
WMT globally engages in the operation of retail, wholesale, other units, and eCommerce. It operates in three segments: Walmart U.S.; Walmart International; and Sam's Club. The company functions through its supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under the Walmart and Walmart Neighborhood Market brands.
On January 28, 2025, WMT sold its Advanced Systems and Robotics business to Symbotic Inc., a leader in A.I.-enabled robotics technology for the supply chain. The company also signed a commercial agreement covering the development and deployment of automation systems for Accelerated Pickup and Delivery centers at Walmart stores.
Symbotic will develop, build and deploy an advanced solution leveraging its A.I.-enabled robotics platform to offer WMT customers greater shopping convenience through accelerated online pickup and delivery options at stores.
Also, on December 3, 2024, WMT completed the acquisition of VIZIO. The strategic acquisition of VIZIO and its SmartCast operating system allows WMT to serve its customers in new ways to enhance their shopping journeys. It also allows advertisers to connect with customers at scale and boost product discovery through new and differentiated ways.
WMT’s total revenues increased 4.1% year-over-year to $180.55 billion during the fourth quarter, which ended January 31, 2025. The company’s adjusted operating income came in at $7.76 billion, up 7% from the previous year’s period. Its consolidated net income attributable to Walmart was $5.25 billion. Also, its adjusted EPS rose 10% year-over-year to $0.66.
Analysts expect WMT’s revenue for the first quarter (ending April 2025) to increase 3.9% year-over-year to $166.12 billion. The consensus EPS estimate for the ongoing quarter of $0.65 indicates a 7.8% year-over-year growth. Moreover, WMT surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
WMT’s stock has surged 41.1% over the past six months and 77.4% over the past year to close the last trading session at $104.
WMT’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
WMT has an A grade for Stability and Sentiment. It also has a B for Momentum. It is ranked #12 among 35 stocks in the A-rated Grocery/Big Box Retailers industry.
To access WMT’s other ratings (Growth, Quality, and Value), click here.
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WMT shares were trading at $97.98 per share on Thursday afternoon, down $6.02 (-5.79%). Year-to-date, WMT has gained 8.44%, versus a 4.06% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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