We recently heard about Warren Buffett and his team at Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) in Q4 2020, retailer Kruger (NYSE: KR). In a Fool Live video recorded Feb. 22, Fool.com contributor Matt Frankel, CFP and Industry Focus presenter Jason Moser discusses why Buffett loved Roger and the grocery industry so much.
Matt Frankel: You mentioned Kruger, and he has been with Kruger for quite some time. Remember that the supermarket has been losing popularity for a while. Everyone thought Amazon (NASDAQ: AMZN) would take the job.
Jason Moser: Yes, I remember Amazon buying Whole Foods. At that point, we saw all the store owners on the day the deal was announced, and stocks at all the grocery stores had fallen. I do not know. This seems to be an unusual response as people have forgotten the opportunity and how great it was to run errands. I think Walmart (NYSE: WMT) is technically the largest supermarket in the country. Kruger, right behind them. Kroger, like other brands, clearly owns Harris Teeter. This is a really good opportunity. Groceries, people should eat. Again, this may not be the hottest act in the world, but it’s perfectly stable.
More Kroger News
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- The CEO of Kroger said that food inflation is expected to reach normal levels in 2021, but that prices may fluctuate
Frankel: Yeah, during the pandemic, supermarkets got pretty good across all channels. I think Buffett looked into this other thing. Everyone thinks this is Amazon’s secret to buying Whole Foods. This will be a grocery store where you can stand on the sidewalk or a grocery store. But now I can get delivery from Publix if needed and if needed I can get delivery from Kroger. There is a retail chain called Lowe’s Foods in the Southeast which is great. They make roadside trucks very efficient and easy. Supermarkets have already adopted Amazon’s main advantage in a number of ways. If I can drive and someone puts food in my box, what’s the difference between ordering it and having it delivered on Amazon the next day? This is almost more convenient.
Moser: You study various processes that are already being implemented at a national level. I immediately thought of Target Stock (NYSE: TGT). In this regard, he has done very well.
Frankel: Yes. When Buffett joined, Kruger was extremely disappointed. I really don’t blame them. I think this is a very worthwhile investment.