The answer: Kroger.
Wal-Mart has been crushed. Whole Foods has been crushed, but check out Kroger, up 22 percent through the end of the second quarter.
Mushkin said two big trends are at play in the Kroger success.
First, in an environment of slow growth and increased regulation, larger companies with scale and advantaged business models can navigate better than peers. As one example, Mushkin pointed to Wal-Mart having to contend with the minimum wage increase battles across the country, versus Kroger, which is unionized, which makes Kroger more competitive.
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An even bigger trend at play in the Kroger story is the importance of "playing down the middle" with investments—meaning the middle class. With unemployment falling and the fresh/organic trend going mainstream, Kroger is in the right spot—what Mushkin referred to as "the vast middle." Kroger may not be the cheapest like Wal-Mart, but it is offering better food at prices that are lower than Whole Foods. "Kroger has learned how to do natural and organic. Whole Foods has an enormous price problem and Kroger can mimic them for less," Mushkin said.
Meanwhile, the analyst said the No. 1 traffic driver for Wal-Mart has been its supercenters but they've been in decline. "They aren't great at 'fresh.' Most of what they are good at is in decline," Mushkin said. He added, "Most of those staples companies are not on trend anymore. Think the unthinkable now in food: soda in perpetual decline, Kroger 'out-competing' Whole Foods."