Amid economic and stock volatility, Warren Buffett remains No. 3 investor in Kroger

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‘Let’s go Krogering’: Downtown Kroger celebrates grand opening

Marty Brennaman, UC marching band and more were on hand for the grand opening of the Downtown Kroger on Sept. 25, 2019.

Cara Owsley,

Soaring inflation, interest rates and volatility are sinking stocks, but legendary investor Warren Buffett remains Kroger’s third-largest shareholder with more than $3 billion in shares.

Hailed as the “Oracle of Omaha,” Buffett is considered one of the most successful investors of all time. A proponent of “value investing,” which prizes a company’s financials over hype, Buffett famously ignores market volatility and trumpets well-run quality businesses that stay profitable.

Value investing becomes very fashionable in tough times as investors exit riskier companies and even buy up “safety stocks” like Kroger (or Procter & Gamble) that grow slower but tend to continue to chug along.

“Only when the tide goes out do you discover who’s been swimming naked,” Buffett has famously said about tough times testing stock performance.

‘Buy less, stretch things out’: Shoppers, Kroger battle food inflation

The nation’s largest supermarket chain, Kroger stock fell out of Wall Street’s favor in mid-2017 when tech juggernaut Amazon suddenly became a direct competitor by acquiring Whole Foods.

Since then, the Downtown-based retailer has aggressively ramped up its online capabilities. First, it quickly expanded curbside or parking lot pickup for customers who ordered online, then began to expand home delivery.

Kroger has pledged to double its digital grocery business to $20 billion in sales by the end of 2023.

So far in 2022, there has been plenty of stock market turbulence: the overall market has flirted closely with bear market territory (an overall 20% downturn from previous highs). But so far this year, Kroger shares are still up double digits.

An investment by Buffett is a tacit endorsement of a company that can prompt other investors to buy shares too. With an estimated net worth of $118 billion, Forbes lists the 91-year-old as the world’s fifth-wealthiest on its 2022 World’s Billionaires list.

Kroger’s stock jumped the day in early 2020 it was first disclosed Buffett had first bought a then-$500 million stake in the nation’s largest supermarket chain. Shares doubled since he bought in – though the stock is off its April 8 all-time high of $62.78.

Buffett’s conglomerate Omaha-based Berkshire Hathaway tripled its Kroger stake between late 2019 and mid-2021. The firm trimmed its holdings by 5.6% in the first quarter of 2022 amid the stock’s all-time high.

Besides Kroger stores, the grocer operates several regional supermarket chains in 35 states, including Fred Meyer, Harris Teeter, Ralphs, Mariano’s, Fry’s, Smith’s, King Soopers, QFC and others. The company has nearly 2,800 stores and employs 420,000 workers.

For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow @alexcoolidge on Twitter.

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