E-commerce has played a major role in helping the retail sector recover from a total collapse during the pandemic. While shops remained closed during the peak months of the pandemic, more people shopped online. This in a way changed the shopping habits of many who now prefer shopping online.
This has seen online grocery sales surging during the pandemic. Given that there are no signs of the coronavirus subsiding, e-commerce is likely to play a major role in the coming days.
Online Grocery Sales Grow
According to Brick Meets Click/Mercatus Grocery Shopping Survey, online grocery sales surged 43% in March on a year-over-year basis. Online grocery sales in March totaled $9.3 billion compared to $6.5 billion a year ago, as the second round of stimulus checks reached millions.
Moreover, the survey shows more than 69 million households placed 2.8 orders on average in March. Over 69.3 million households placed at least one or more online orders during March 2021 compared with 74.5 million a year ago, when stay-at-home orders were imposed and shops and businesses had to be temporarily shut down.
This is a slight loss in the number of people shopping online from last year’s figures but that was primarily because many households are also making grocery purchases that are shipped to the home through common or contract carriers.
In fact, the curbside pickup segment gained 12%, and the delivery segment gained 23% in March, which proves that people are more comfortable shopping online.
Coronavirus Driving Online Sales
Although online grocery sales somewhat declined in February, it has once again bounced back as people spent more freely after the second round of stimulus checks started reaching them. In fact, that has helped the entire industry, with retail sales surging 9.8% monthover month in March to hit a 10-month high.
Moreover, despite three vaccines being rolled out, the COVID-19 crisis is far from over, with new cases hardly subsiding. Also, many who are hesitant to shop at a physical store but at the same time don’t want to pay for certain online grocery items have been going for curbside pickup, which is driving online sales further. Hence, online shopping will remain the preferred choice for most despite the COVID-19 vaccine being already rolled out.
Fears of the virus continue to exist irrespective of the vaccination drive. Preventive measures to keep the virus at bay are likely to see people ordering for all household necessities, including grocery, online. Given this situation, it would be prudent to watch out for these five stocks thatare likely to rally on a sharp rise in demand for online grocery in the near future.
United Natural Foods, Inc. UNFI is the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. The company carries more than 1,10,000 high-quality natural, organic and specialty products, consisting of national, regional and private label brands in six product categories.
The company’s expected earnings growth rate for the current year is 29%. The Zacks Consensus Estimate for current-year earnings has improved 8.7% over the past 60 days. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
J & J Snack Foods Corp. JJSF is a manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries.
The company’s expected earnings growth rate for the current year is 88.3%. The Zacks Consensus Estimate for current-year earnings has improved 2% over the past 60 days. J & J Snack Foods holds a Zacks Rank #2.
Sprouts Farmers Market, Inc. SFM which operates in a highly fragmented grocery store industry, has a unique model that features fresh produce, a foods section, and a vitamin department focused on overall wellness.
The company’s expected earnings growth rate for next year is 10.2%. The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the past 60 days. Sprouts Farmers Market has a Zacks Rank #2.
Performance Food Group Company PFGC markets and distributes food and food-related products. Its operating segment consists of Foodservice, Vistar, and PFG Customized.
The company’s expected earnings growth rate for the current year is 85.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 60 days. Performance Food Group carries a Zacks Rank #2.
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