The Kroger Co.

Kroger is the United States number one standalone grocery retailer. While the company is smaller than Wal-Mart's grocery division, more than $60 billion in annual sales is nothing to laugh at. The company's location in the South and Midwest occurred by no accident. The company has repeatedly tried to compete in western Pennsylvania but has been unsuccessful due to a series of management missteps, local competition, and labor difficulties.

Kroger runs a series of grocery stores that don't particularly attempt to compete on price. Rather, the company has succeeded in convincing numerous consumers to pay significantly more for cleaner stores with more employees.

Ironically, Kroger's strength in the Midwest is actually more of a liability than an asset in the near term due to continuing economic weakness there. Kroger's southern stores have been repeated out-competed by H-E-B, most notably in San Antonio, and Wal-Mart.

Kroger is not a particularly good value for its customers and investors should look elsewhere for profits in this sector. Wal-Mart is certainly more than a grocery store, but the rest of the company is a better bet for future growth than Kroger's stale, over-priced brands. If you're looking for a pure play on the grocery market, consider Whole Foods Markets. Impending strikes throughout California will give Whole Foods' labor-unfriendly business model a competitive advantage.