U.S. consumer staples stocks limp after solid performance in 2022

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Grocers, packaged food companies and supermarkets have been lagging in the first three weeks of 2023

Shares of U.S. grocers, packaged food companies and supermarkets were lagging in the first three weeks of 2023, in a sharp contrast to last year, as their high valuations and unattractive dividend appeal pushed investors to U.S. Treasuries.

In a reversal of the trend, consumer staples sector has shed 3.4% in 2023, the most among the major S&P sectors, while the S&P 500 has climbed 1.5% on easing bets of a severe economic downturn. “You couple this with the fact that there are other yield alternatives now relative to the yield-rich sector of staples.”

The U.S. 10-year Treasury yield stands at 3.4%, while the consumer staples sector is offering a dividend yield of 2.7%, according to Refinitiv data.

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