Hottest Grocery Stock: Kroger Tops Poll

NEW YORK (TheStreet) -- In this week's retail poll, we asked readers of TheStreet.com to weigh in on the question of which supermarket chain is best poised to gain market share.

The winner, with an even third of the vote, was Kroger(KR Quote), which announced earlier this week that it would crank up its manufacturing of private-label products by 15%. Unlike most grocers, who contract with third-party companies to make their private-label products, Kroger produces almost 50% its goods in-house.

The rest of the traditional grocers didn't fare as well against the cut-rate food sellers, as Wal-Mart Stores(WMT Quote) and Costco Wholesale(COST Quote) ranked second and third in our reader survey, with 23% and 18% of the vote, respectively.

Earlier this week Costco said its fourth-quarter profit fell 6% to $374 million, or 85 cents a share, better than analysts predicted. The company's same-store sales rose 1%, lifted, indeed, by strength in its grocery aisles.

Safeway(SWY Quote) came in fourth with 15.4% of the vote, leaving Supervalu(SVU Quote) as the loser of the bunch with only 13%. Our poll takers seemed to agree with Wall Street. Supervalu was downgraded on Friday by Barclay's Capital to equal weight from over weight.

Analyst Meredith Adler cited promotion wars among grocers and Supervalu increasing its sale of lower-priced products, which has cut into profit margins.

-- Reported by Jeanine Poggi in New York