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The Grocery Game Is Winnable Again, And These Stocks Fit The New Bill

Author

Noah Zelvis
January 21, 2026

Inflation cooled just enough in 2025 to give households room to get tactical. Not reckless, tactical.

When prices stop accelerating, shoppers become optimizers: they trade down on staples, buy in bulk, lean into private label, and still keep a couple affordable indulgences.

That pattern is predictable, and predictable is investable.

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Here’s the good news first: inflation actually cooled in 2025. Headline eased from 2.9% to 2.7%, and core did even better, sliding from 3.2% to 2.6%. That matters because it changes behavior.

When inflation is accelerating, people feel out of control. When inflation is still annoying but slowing, people get tactical.

That is the real story of 2025: consumers became better shoppers.

  • Gas got cheaper. That frees up a little breathing room and makes people feel like they are not losing every single week.

  • Eggs dropped hard. It is not life changing, but it is a visible win that reinforces the idea that price pressure can cool.

  • Groceries still rose 2.4% and sped up versus 2024, so the weekly staples category stayed stubborn.

  • Coffee and beef ran hot, which is basically the universe testing everyone’s patience.

So no, your grocery receipt did not magically shrink. But slower inflation shifts the game from survival to optimization: bulk buys, private label, fewer trips, more planned baskets, and more value hunting.

Those habits tend to stick. Once someone realizes the warehouse club saves real money, they do not suddenly go back to chaos shopping just because headline CPI prints a nicer number.

That is the investing edge here: the “smart shopping” economy creates repeatable winners.

Not because consumers stop spending, but because spending gets redirected toward the models that make people feel clever.

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Actionable Stuff

  • Own the trade-down funnel. The winners are not always the cheapest. They are the ones that let customers feel like they beat the system.

  • Bet on staples and repeat trips. Grocery-adjacent traffic is gold because it refreshes constantly.

  • Follow private label and membership. Both are quiet margin tools in a value-driven world.

  • Watch unit volumes more than headlines. If customers keep showing up and baskets stay stable, the model is working.

  • Look for pricing power with trust. The best brands can raise prices without triggering rage quits. The worst get replaced by store brand in 10 seconds.

  • This is a grind market, not a panic market. Build positions like a grown-up: scale in, don’t YOLO.

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Top Picks

Ollie’s Bargain Outlet (NASDAQ: OLLI)

In a world where groceries stay sticky, value hunting turns into entertainment.

Ollie’s sells branded closeouts at real discounts, so customers get the double win: saving money and feeling like they found something special.

That matters because people will “trade down” all day, but they hate feeling like they downgraded their life. Ollie’s solves that emotionally.

It also fits the habit shift. If shoppers are planning more, they are also willing to rotate stores and chase deals.

Off-price thrives when consumers are active and picky, which is exactly what this inflation backdrop produces.

What to watch: Same-store sales, traffic trends, and inventory flow. Off-price works best when the deal pipeline stays full.

BJ’s Wholesale Club (NYSE: BJ)

If groceries are the pain point, bulk buying is the cheat code. BJ’s benefits when households decide they are done paying peak prices for basics in small packages.

Membership models are quietly powerful here because the customer is not just buying products, they are buying a plan.

And once the plan saves them money, renewals tend to stay sticky.

BJ’s also has the right levers for this moment: private label to protect margins, promos to keep value perception high, and a basket that is built around stuff people need on repeat.

What to watch: Membership renewal rates, traffic, and commentary on private-label mix and grocery share of wallet.

Sprouts Farmers Market (NASDAQ: SFM)

Sprouts is a nice fit for the new consumer mindset: spend smarter, not necessarily spend less.

A lot of shoppers still want to eat better, but they are getting more strategic about where they do it. Sprouts can catch that middle lane, healthier than traditional grocers but not priced like a boutique wellness shrine.

If grocery inflation stays uneven, the retailers that keep loyalty while managing costs are the ones that win.

Sprouts has a shot at that because it can deliver perceived quality while still playing the value conversation.

What to watch: Traffic, basket size, and margin stability. If visits hold up and margins don’t leak, it’s doing its job.

Dutch Bros (NYSE: BROS)

Here’s the funny part of inflation: people will cut big purchases first, then aggressively protect the small rituals that keep them functional. Coffee is the poster child.

Even with coffee prices up hard, caffeine demand remains undefeated, and Dutch Bros plays directly into that affordable indulgence habit.

In this environment, the winners are the brands that keep customers coming back without making them feel like the price is getting disrespectful.

If Dutch Bros can hold transaction growth while managing input costs, it becomes a clean read on consumer resilience.

What to watch: Transaction growth, ticket size, and management commentary on input costs and pricing discipline.

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Bottom Line

Inflation cooled in 2025, and that is not just a macro headline. It changes how people shop.

The grocery game is still annoying, but it is more playable now, and consumers are proving they will adapt fast: bulk, bargains, private label, and smarter routines.

So the setup is actually constructive: own the companies that benefit from shoppers getting sharper. People are still spending. They are just spending like they want to win.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes