Zacks Industry Outlook Highlights Walmart and The Kroger

For Immediate ReleaseChicago, IL – October 24, 2025 – Today, Zacks Equity Research discusses Walmart Inc. WMT and The Kroger Co. KR.Industry: SupermarketsLink: https://www.zacks.com/commentary/2775256/2-supermarket-stocks-poised-for-steady-gains-on-omnichannel-strategiesCompanies in the Zacks Retail – Supermarkets industry are leveraging consistent consumer demand while accelerating the use of AI-driven omnichannel strategies to deliver greater convenience, efficiency and personalization. These initiatives are strengthening the competitive positions of leading players such as Walmart Inc. and The Kroger Co., supporting their prospects for sustained long-term growth.At the same time, the industry continues to navigate economic challenges that are influencing shopper behavior. Rising labor expenses, store modernization efforts and ongoing technology investments are weighing on margins. In response, retailers are adjusting their product mix, focusing on value and updating merchandising to keep pace with changing shopper needs.About the IndustryThe Zacks Retail – Supermarkets industry includes supermarket retailers that offer grocery, health and beauty aids, household chemicals, electronics, stationery, automotive accessories, hardware and paint, sporting goods, fabrics and crafts, entertainment products, home furnishings and more. Players in this industry operate through various formats such as supermarkets, multi-department stores, retail stores, discount stores, supercenters, hypermarkets and warehouse clubs. Food retail accounts for a chunk of their business.The industry has undergone a significant transformation over the years, with e-commerce playing a strong role. Given consumers' rising preference for online shopping, industry participants have enhanced pickup and delivery services and are offering easy payment options.Major Trends Shaping the Future of the Supermarket IndustryAdvanced Omnichannel Acceleration: Supermarket chains are intensifying their focus on blending digital and physical retail to offer a unified shopping experience. Investments in modern store formats, broader assortments, and smarter inventory systems are enhancing convenience and efficiency.With online grocery adoption staying strong, retailers are fast-tracking digital upgrades through technology partnerships, acquisitions, and improved logistics and payment ecosystems. Services such as same-day delivery, curbside pickup and contactless checkout have become core expectations.Artificial intelligence now plays a central role, powering real-time inventory management, personalized marketing and data-driven customer engagement. These innovations are redefining the supermarket model and setting the stage for sustained growth in a tech-enabled, convenience-driven marketplace.Stable and Resilient Consumer Demand: Grocery retailers continue to benefit from steady demand, supported by the essential nature of food and household staples. Despite economic uncertainty, both in-store visits and online orders remain robust, underscoring the sector's defensive appeal. Shoppers are increasingly drawn to fresh, healthy and locally sourced options, while digital convenience continues to drive repeat purchases.Retailers are adapting quickly, refreshing assortments, enhancing value propositions and leveraging data insights to align with evolving consumer habits. This resilience, combined with the industry's agility, keeps supermarkets well-positioned as dependable performers within the broader retail landscape.Profit Margins Under Pressure: Supermarket players are battling persistent cost inflation across operations. Rising labor costs, store refurbishments, and heavy spending on e-commerce and technology upgrades continue to elevate expenses. Marketing, digital initiatives and competitive promotions further weigh on margins.In addition, higher import tariffs and supply-chain disruptions are inflating procurement costs, while cautious consumer spending adds pressure on pricing power. Retailers are increasingly focused on optimizing efficiency, managing expenses, and prioritizing strategic investments to protect margins while maintaining innovation and service quality.Zacks Industry Rank Indicates Robust ProspectsThe Zacks Retail – Supermarkets industry is housed within the broader Zacks Retail – Wholesale sector. The industry currently carries a Zacks Industry Rank #98, which places it in the top 40% of more than 250 Zacks industries.The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence about this group's earnings growth potential. Since the beginning of August 2025, the industry's consensus earnings estimate for the current fiscal year has risen by a cent.Let's look at the industry's performance and current valuation.Industry Versus Broader MarketThe Zacks Retail – Supermarkets industry has outperformed the S&P 500 and the broader Zacks Retail – Wholesale sector in the past year.The industry has surged 28.8% over this period compared with the S&P 500's growth of 17.5%. Meanwhile, the broader sector has advanced 12.2% in the said time frame.Industry's Current ValuationOn the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing retail stocks, the industry is currently trading at 34.48X compared with the S&P 500's 23.39X and the sector's 24.61X.Over the last five years, the industry has traded as high as 34.48X and as low as 17.55X, with the median being at 22.15X.2 Supermarket Stocks to Keep a Close Eye OnWalmart: The Zacks Rank #3 (Hold) company is benefiting from the inherent strength of its highly diversified business model. The company's strong omnichannel strategy has boosted traffic at physical stores and digital platforms. Walmart's focus on improving delivery services is successful, leading to steady grocery market share gains.Key initiatives, such as Walmart Marketplace, Walmart Connect (its advertising platform) and Walmart+ (its membership program), are not only enhancing customer engagement but also contributing to higher-margin revenue streams. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for WMT's current fiscal year earnings per share (EPS) has remained unchanged in the past 30 days at $2.60. Shares of Walmart have rallied 29% in the past year.The Kroger Co.: The Zacks Rank #3 company continues to leverage its customer-first strategy, robust private label portfolio, and expanding digital ecosystem to drive shopper engagement and loyalty. Strength in pharmacy, personalized promotions and investments in fresh food offerings underpin its core growth.Digital initiatives, including fulfillment expansion and Boost membership, are gaining traction, while retail media and health & wellness offer incremental profitability. Investments in automation and AI-driven inventory management continue to enhance operational efficiency, reduce waste and improve margins, positioning Kroger for long-term scalable growth.The Zacks Consensus Estimate for KR's current fiscal-year EPS has remained unchanged at $4.79 in the past 30 days. Kroger's shares have jumped 21% in the past year.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance  for information about the performance numbers displayed in this press release.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Walmart Inc. (WMT): Free Stock Analysis Report The Kroger Co. (KR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks