Wal-Mart Stores, Inc. (WMT), Costco Wholesale Corporation (COST) And The Best Big Box Grocer for Buy-and-Hold Investors

A change in the future?

However, Costco may represent the best investment for buy-and-hold investors. It has a high recurring revenue component in the form of its membership fees and loyal customer base. Its membership fees allow Costco Wholesale Corporation (NASDAQ:COST) to sell its products at break-even prices, which leads to continual market share gains.

And while Kroger does not have a warehouse club component, it has borrowed from its warehouse club rivals using gasoline as a loss leader; the strategy has driven significant increases in store traffic and has helped it to gain market share while its competitors flounder.

Bottom line

Buy any of these three companies will likely turn out well for long-term shareholders, but Costco Wholesale Corporation (NASDAQ:COST) has the best future. Wal-Mart Stores, Inc. (NYSE:WMT)’s Sam’s Club stores are its crown jewel, yet the company has diversified away from the club stores by trying to become a universal retailer. Meanwhile, Costco has stuck to its bread-and-butter and will continue to grow shareholder value for decades to come.

The article The Best Big Box Grocer for Buy-and-Hold Investors originally appeared on Fool.com and is written by Ted Cooper.

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