Is This the Death of Grocery Stores — All Over Again?

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After a massive run higher, the national grocery store chain business model seems under fire from all angles. Kroger Co. (NYSE: KR) appears to be having its worst day, after reporting earnings. However, this is not the only stock suffering, as a few other national chains are feeling the burn as well.

It just seems that there are too many sources for getting groceries. Additionally, the advent of online grocery shopping is not helping. Also services like Blue Apron are acting like the cooking-show in a box for millennials, further deterring grocery shopping. Not to mention that all this is happening at a time when restaurants have all struggled to find their niches in a peak-store theme.

24/7 Wall St. has taken a look at the industry as a whole and compiled some updates on each of the major players.

As mentioned, Kroger is seeing the worst of it after reporting its most recent quarterly results. Even though the company beat estimates for this quarter, guidance held the company way back. In fact the stock hit a multiyear low, not seen since 2014.

The company said that it had $0.58 in earnings per share (EPS) and $36.28 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.58 in EPS and revenue of $35.77 billion.

In terms of guidance for the full year, Kroger lowered its EPS estimate to a range of $2.00 to $2.05 from the previous range of $2.21 to $2.25. Consensus estimates are $2.19 in EPS and $121.24 billion in revenue for the fiscal year.

Shares of Kroger were last seen down 17% at $25.00, with a consensus analyst price target of $34.00 and a 52-week trading range of $24.54 to $37.97.

Albertson’s has been filing for its initial public offering for years now. It seems that this always gets postponed, but considering the current climate in the industry it makes sense for the company to continue putting this off, even with the broad markets near all-time highs.

Whole Foods Market Inc. (NASDAQ: WFM) can’t seem to find growth in its current state. Also this organic grocer’s business model is under fire by increased competition from the likes of Kroger, HEB and other regional grocers looking to provide an affordable organic selection as well. Sprouts Farmers Market Inc. (NASDAQ: SFM) is suffering a similar fate, but it’s a little rougher because Whole Foods is much larger.

Shares of Whole Foods were down over 6% at $33.19, with a consensus price target of $33.95 and a 52-week range of $27.67 to $38.29. Sprouts shares traded down 8% at $22.74, in a 52-week range of $17.38 to $25.98.

United Natural Foods Inc. (NASDAQ: UNFI) saw its shares almost hit a 52-week low after it signaled lower guidance. The company estimates net sales in the range of approximately $9.29 billion to $9.34 billion, compared to previous guidance of $9.38 billion to $9.46 billion. The EPS guidance remained unchanged.

Shares of United Natural Foods were last seen down 3% at $40.00, in a 52-week range of $38.52 to $52.18.

A few other players in the mix are:

  • Blue Apron, filing for its IPO.
  • Costco, providing low-cost whole sale goods.
  • Wal-Mart offers a big grocery selection along with its huge retail operation.
  • Trader Joe’s and a slew of independent chains, like HEB and other regionals, are also taking a bite out of the pie.

Is it possible that there are just too many choices to get food now for it to be as profitable for the food industry as a whole?