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2023 Grocery Outlook Webcast Replay & Materials: CLICK HERE |
Hedgeye's Macro team continues to see further evidence that 1H23 is in Quad 4. The consumer has not seen this level of food inflation in a generation. Food inflation has peaked but will stay elevated despite easing input costs. Following the USDA's lead, the consensus has penciled in food-at-home inflation of 2.5% to 3.5% for 2023. We will show how our starting point for 2023 top-line growth for food retailers is north of 3.5%. We will also do a deep dive into the changing tailwinds and headwinds for the sector, followed by a critical driver analysis of how each of our covered food retailers (KR, ACI, COST, BJ, WMT, GO, SFM) is impacted.
As part of our 2023 outlook for the food retailers, we made several changes to our position monitor:
- BJ Wholesale Club (BJ): Moved from our Best Idea Long List to our Best Idea Short List.
- Kroger (KR): Moved up from our Short Bias List to our Best Idea Short List.
- Albertsons (ACI): Moved down from our Best Idea Short List to our Short Bias List.
- Costco (COST): Remains a Best Idea Long.
- Walmart (WMT): Remains a Best Idea Long.
- Grocery Outlet (GO): Remains a Best Idea Long.
- Sprouts Farmers Market (SFM): Remains a Best Idea Short.
Our investment themes:
Our updated position monitor:
