The Top 10 Grocery & CPG Stocks: Q3 Split Grocery and Retail Stocks Into Winners and Losers

Late last year we sat down and hand-picked a “basket” of stocks we felt was fairly representative of or important to the food trade. There are national and even international grocery chains, warehouse clubs, discounters, and, well, Amazon.com. When we feel it’s appropriate, we track big CPG names like PepsiCo, as well. We use Google Gemini and occasionally ChatGPT to “keep score” and then I report on them every week. 

It’s been interesting work – and now, with the advent of the fourth quarter of 2026, I think it’s the perfect time to take a look back at how our basket did over the third quarter. 

Traditionally – you might say in your grandfather’s stock market – grocery and consumer staple stocks are thought of as “defensives,” or safe places to park capital when things get rough. Now, that can still happen, but in today’s market, with artificial intelligence, geopolitical mayhem, a dozen trillion-dollar stocks, tradition is more or less out the window. The practical upshot is that we see our stocks often behave in “interesting” and unexpected ways.  

With all that said, let’s take a look at the powerful forces that moved our stock basket throughout the third quarter…

The Third-Quarter Backdrop: Resilient Consumers, Sticky Inflation

The past three months gave investors plenty to worry about, but not enough to knock the broader market off course.

Energy remained one of the biggest complications. The conflict involving the U.S., Israel and Iran kept pressure on oil and fuel markets, feeding into transportation costs and household budgets. By August, the Consumer Price Index was running 3.4% above year-ago levels, while energy prices were up 16.3%. Grocery inflation was quite a bit more restrained, with food-at-home prices up 2.2%.

Consumers were still spending, but hardly indiscriminately. Grocery retailers spent much of the quarter emphasizing value, promotions and price investments as shoppers continued making choices about where they could save and where they were willing to spend.

The Federal Reserve added another wrinkle in September, raising its target federal funds rate by 25 basis points to 3.75%–4%. Even so, the S&P 500 held up well. Using our measurement of the July 1 opening price through the Sept. 30 close, the index gained 2.31%, from 7,478.84 to 7,651.54.

For grocery and retail stocks, however, there was no single trade that “worked.”

Target Leads a Highly Uneven Quarter

Target Corp. (NYSE:TGT)  was easily the standout, jumping 20.72% from $129.80 to $156.69. That’s a significant move for a retailer that entered the quarter still facing questions about traffic, discretionary spending and its value proposition. Whatever concerns remained about the underlying business, investors clearly became more optimistic.

Kroger Co. (NYSE:KR) was another strong performer, rising 7.56% from $54.50 to $58.62. That came despite a mixed second-quarter report in which identical sales excluding fuel increased just 0.2% and Kroger lowered its full-year identical-sales guidance. Adjusted EPS nevertheless increased 5%, while adjusted e-commerce sales grew 20%.

Dollar General (NYSE:DG) gained 5.90% and BJ’s Wholesale Club Hldgs Inc. (NYSE:BJ) rose 5.40%, both comfortably beating the broader market. Amazon.com Inc. (NASDAQ:AMZN) also edged ahead of the S&P 500 with a 3.92% gain.

But the value story was far from universal. Walmart Inc. (NASDAQ:WMT) reported second-quarter revenue growth of 5.9%, U.S. comparable-sales growth of 2.6% and a 23% increase in global e-commerce sales, yet its shares declined 5.64% during our measurement period.

Costco Wholesale Corp. (NASDAQ:COST) provided an even clearer example of strong operations not necessarily translating into stock gains. Fourth-quarter net sales jumped 11.2% to $93.9 billion, with U.S. comparable sales up 10.7%. Costco shares nevertheless declined 3.20%, from $940.43 to $910.34. At Costco’s valuation, excellent results are probably what investors already expected – in other words, “sell the news.” 

Sprouts Takes the Biggest Hit

Sprouts Farmers Market Inc. (NASDAQ:SFM) was the quarter’s biggest loser, falling 22.31% from $85.40 to $66.35. Second-quarter sales increased 5%, but comparable-store sales declined 1%, giving investors reason to reconsider expectations after the stock’s previous run.

Albertsons Cos. Inc. (NYSE:ACI) also had a difficult quarter, falling 14.54% from $13.55 to $11.58.

Koninklijke Ahold NV’s (OTC:ADRNY) American depositary receipts (ADRs) declined 8.83%, despite reasonably solid underlying results. Second-quarter sales reached €23.2 billion ($26.1 billion), up 1.9% at constant exchange rates, while U.S. comparable sales excluding gasoline increased 0.8%. The company also reiterated its full-year guidance.

There Was No Single Q3 Grocery Trade

If there’s one solid takeaway from the quarter, it’s that “consumers are looking for value” isn’t enough to explain what happened to these stocks.

Target gained nearly 21% while Walmart fell nearly 6%. Kroger and Dollar General beat the market, while Albertsons and Ahold Delhaize lost ground. Costco delivered excellent operating results and still declined. Sprouts remained a growing retailer but lost more than one-fifth of its market value during our measurement period.

Meanwhile, the S&P 500 gained 2.31%.

During the quarter that just wrapped up, consumers remained resilient… but very selective, and grocery inflation remained considerably lower than headline energy inflation. Investors were just as selective, making very sharp distinctions about valuation, expectations and which companies had the most room to improve.

The Top 10 Grocery & CPG Stocks

A quick but important note about our tracking methodology for this: Stock performance is measured from the opening price on July 1 through the closing price on September 30. These figures reflect share-price movement only; they don’t include dividends or other distributions, so they shouldn’t be considered total shareholder return.