It’s first and foremost a numbers game in this week’s Grocery Tracker as we take a look at how the first few weeks of the new year have (or haven’t) affected the stock values of some of the nation’s largest publicly traded supermarket chains.
Whole Foods’ stock remains in a valley, with stock prices fairly consistent in the upper 20s and low 30s throughout the end of 2015, 2016 and continuing into 2017. At the time of writing, WFM was up 0.41 percent in the day’s trading, at $30.93.
Big-box warehouse club Costco’s stock has successfully pulled itself out of its Q3 slump — a low of $142.24 in November has since recovered to late-summer highs in the low 160s. A decade-long view shows consistent growth since 2009, though the peaks and troughs that average out to Costco’s growth have become considerably more extreme since late 2015. Forecasts show a median potential for growth at 9.5 percent, though some remain wary as Costco’s stock has the potential to fall just as much as it could rise in the next 12 months.
Investors are largely bullish on Kroger, whose stock has stuck around in the low to mid-30s since the new year began and even a bit before. However, 2016 was largely a period of gentle decline for KR, down 17 percent year on year from an all-time high on Christmas Eve 2015. But after hitting a year low of $29 even in October last year, prices rose back a bit during the holiday season.
The new year has also been decent to international food retail group Ahold Delhaize, which owns Food Lion, Hannaford and Stop & Shop, among others, in the U.S. The end of 2016 saw a 14 percent decline in Ahold Delhaize’s value, bottoming out in early December at €18.11 ($19.25). While the month of December saw a quick rise to pre-Q3 2016 values, January has seen a bit of a slump with a YTD return of -1.82 percent.
Clean Label Movement Picks Up Steam
The clean label movement is picking up steam as food manufacturers push out the new system to grocers nationwide. “Clean labels” show up on products with relatively few ingredients and preservatives and provide information about sugars, fats and sodium.
Supermarkets that have adopted clean label programs are also removing most of what the Center for Science in the Public Interest considers the riskiest food additives, including synthetic food dyes and artificial sweeteners, like aspartame.
As of now, there is no official definition for a clean label product. The problem here is that, simply because something is a natural ingredient, that doesn’t mean it is inherently healthy or safe. Likewise, a synthetic ingredient isn’t unhealthy or dangerous by default.
Fear and misinformation do have a tendency to take hold over the consumer consciousness in nebulously defined cases such as this. Still, for nutritionists and health advocates, the movement is a step in the right direction and comes at a key point for health-conscious consumers. Regardless of what’s actually in the product, nutrition labels just don’t cut it anymore.
Trust in food manufacturing industry labeling practices is low. A recent survey of consumers from International Food Information Council, for example, found that just 8 percent of respondents fully trust food labels to accurately represent the nutritional and ingredient information of what is contained in various food products. Additionally, according to a C&R research study, 48 percent of respondents reported never trusting food labels.
The FDA did its part in 2016 to try to ensure more readable, informative nutritional labels — partly through cosmetic changes to type size, updating serving size requirements and reflecting the latest in nutrition science.
While the additional information may seem like a big step toward transparency and regaining consumer trust, research has also found that a large number of consumers would prefer simpler information on their labels. C&R research also found that 47 percent of consumers want simpler labeling information. This group would rather see FDA manufacturer seals of approvals than transparent packaging information.
Intriguingly, some 67 percent in this “Keep it Simple” consumer category don’t read labels on brands they trust. While this, at first, may seem counterintuitive, this consumer segment most likely doesn’t extract much useful information from labels in the first place. For them, wherever the trust in brands is coming from, labels have nothing to do with it.