Kroger is a safety stock that can withstand inflation, Jim Cramer says

Grocery retailer Kroger is sustaining its place as a powerful performer as rivals wrestle with inflationary pressures, Cramer mentioned.

“We have got the worst inflation in many years, which is dangerous information for the entire business besides Kroger, which we all know is coping simply positive with inflation and even has increasing gross margins,” the “Mad Cash” host mentioned.

“We all know Kroger’s protected as a result of they’re doing nice proper now, and if the Fed tightens too aggressively, inflicting an precise recession, this inventory will solely get extra engaging as a result of it is precisely what cash managers wish to personal after they’re nervous about an actual slowdown,” he added.

Cramer’s feedback come after the Federal Reserve raised rates of interest by a quarter-percentage level on March 16, spurring a market rally. Chair Jerome Powell mentioned Monday the Fed might implement extra aggressive rate of interest hikes for the remainder of the yr to fight inflation, main shares to fall in a risky buying and selling session.

Kroger inventory fell 0.25% on Monday. The grocery chain, which noticed a lift in the course of the pandemic as shoppers turned to at-home cooking, forecast annual same-store gross sales and revenue above Wall Avenue expectations in its most up-to-date quarterly earnings report. Kroger’s same-store gross sales, minus gas, elevated 4% within the fourth quarter.

Cramer attributed Kroger’s latest success to the corporate’s large-scale and omnichannel enterprise that allowed it to construct out a powerful digital presence as extra clients flip to supply and pick-up choices. The host additionally highlighted the corporate’s high-profile partnerships, together with with Starbucks and DoorDash. 

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