While an upswing in coronavirus infections and supply chain disruptions are significant concerns, the retail industry is expected to benefit from growing online sales and the resumption of foot traffic in brick-and-mortar stores during the holiday season. So, Albertsons (ACI) and Grocery Outlet (GO) could generate stable returns. But which of these two stocks is a better buy now? Read more to find out.Albertsons Companies (ACI) in Boise, Idaho, operates food and drug stores in the United States. The company's food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. In comparison, Emeryville, Calif.-based Grocery Outlet Holding Corp. (NASDAQ:GO) owns and operates a network of independently operated stores. The company's stores offer products in categories that include dairy and deli, produce, floral, and fresh meat and seafood.
Investors’ concerns over the pace of economic recovery due to the resurgence of COVID-19 cases, high inflation, and a supply chain crisis have kept the market volatile. However, several retail companies have strengthened their online presence. Also, most retailers are dealing with inflation and product shortages by passing on higher costs to their customers through price hikes. Furthermore, the gradual revival of foot traffic in retail stores with the reopening economy should support retailers' growth. Indeed, according to a Research and Markets report, the global retail market is expected to grow at a 7.7% CAGR through 2025. Therefore, both ACI and GO should benefit.
GO has gained 20.8% in price over the past three months, while ACI has returned 2.5%. However, ACI’s 60% gains over the past six months compare with GO’s negative returns. Moreover, ACI is the clear winner with 98.5% gains versus GO’s negative returns in terms of the past year’s performance.