The Grocery Wars Are Getting Costlier. These Stocks Could Weather the Fight

The grocery business is becoming a tougher place for traditional supermarkets. Americans are spending more on food deliveries, AmazonAMZN is taking market share, and KrogerKR is preparing a $5B response. For investors, the divide between the retailers gaining ground and those trying to catch up is getting harder to ignore.

Amazon is filling more carts

Online grocery spending hit a record 20.9% of total US grocery sales in the third quarter, with online sales rising 20.7% from a year earlier. In-store sales declined over the same period, while delivery grew more than 30% and accounted for roughly three-quarters of online grocery's growth.

Nearly 62% of US households now shop for groceries online in a typical month. That's giving retailers with established delivery operations a growing advantage, and the market share numbers show who's benefiting.

Amazon and Whole Foods recorded the biggest food and beverage share gains among 15 retailers tracked by Numerator over the 12 months through June. CostcoCOST ranked second, followed by WalmartWMT.

Amazon also gained 1.0 percentage point in packaged goods share, while Kroger, AlbertsonsACI, and Ahold Delhaize USA each lost ground.

Amazon wants the fresh stuff too

Fresh groceries were one area where traditional supermarkets had an advantage. Shoppers could choose their own produce, inspect seafood, and pick up dairy without waiting for a delivery. Amazon is making that advantage less meaningful.

Its seafood, dairy, and produce sales increased severalfold between June and August, according to NielsenIQ data reported by Business Insider. Amazon also gained food market share across online and overall sales in the year through late August, even as conventional supermarkets lost ground.

The company extended same-day fresh grocery delivery across thousands of US cities and towns roughly a year ago, giving customers more reasons to make Amazon their regular grocery stop.

Walmart is making its own push. US ecommerce sales climbed 24% last quarter, and the retailer had more than 11K products on temporary price cuts. That leaves traditional supermarkets competing on both convenience and price.

Kroger puts $5B into the fight

Kroger isn't giving up shoppers without a fight. The supermarket chain plans to spend $5B on lower prices and simpler promotions through 2029, after identical sales growth slowed to just 0.2% in its latest quarter from 3.4% a year earlier.

The company also plans to open 110 stores and increase ecommerce from roughly 11% of total sales to 30% within five to seven years. That's an ambitious target for a business that already generated more than $16B in online sales in fiscal 2025, particularly as Kroger has lowered its long-term adjusted earnings growth target to 7% to 11%.

Albertsons is facing a different challenge. The company withdrew its fiscal 2026 outlook pending a comprehensive business review after identical sales fell 0.8%. Digital sales grew 11%, but the broader business is still struggling to regain momentum.

Which grocery stocks look stronger?

For investors, Amazon, Walmart, and Costco have the stronger case for an overweight position. All three are gaining share, while the shift toward online grocery plays to their existing strengths.

Kroger and Albertsons look less attractive for now, with one committing billions to a turnaround and the other operating without full-year guidance.

The risk is that competition gets expensive for everyone. Walmart is already cutting prices, and a prolonged discount war could pressure margins even at the biggest retailers. Kroger's planned Giant Eagle acquisition could also help it close the gap if its broader strategy delivers.

Still, the spending plans tell an important story. Kroger is putting $5B into winning back customers, while Amazon and Walmart are already capturing more of their grocery spending.