Consumer Staples Stocks

Consumer staples stocks have historically been safe bets amid risky economic cycles, and the market has been showing its preference for these stocks in recent months.

In today’s edition, we cover the historical performance of consumer staples stock, the outlook in 2026, and some dominant names in the market to consider.

Consumer Staples Stocks Outlook

Consumer staples stocks have historically proven to be resilient amid recessions and other riskier economic conditions, and can be safe bets in the market as tensions rise. Moreover, consumer stocks are currently trading at reasonable valuations, while other sectors like IT have expanded to new highs.

The recent breakout in consumer staples stocks is well worth monitoring, as the growth outlook for many of these stocks is favorable, and many of these stocks also trade at a slight discount to the S&P 500.

Consumer Staples Historical Performance

Consumer staples stocks have historically been a safer bet in the market, relative to consumer discretionary stocks, which tend to be better options during positive economic cycles. Some of the leading consumer staples names in the market include Walmart, Costco, and Coca-Cola, all of which produce products that have had consistent demand from consumers.

Consumer discretionary stocks, on the other hand, include leading giants like Amazon and Tesla, which typically also perform favorably during market bull runs. Consumer discretionary stocks also have many appeals, although consumer staples stocks are often safer bets when market conditions correct.

2025 was a lackluster year for many consumer staples stocks, which significantly underperformed the tech-driven rally of the S&P 500. These stocks underperformed the S&P 500 by around 14 percentage points during the first 11 months of 2025, signaling investors' previous preference for higher risk themes.

This trend of underperformance of consumer staples stocks has been prevalent since the tech and growth-fueled rally following Covid. Consumer stocks were underperformers during 2022-2023, and consumer stocks have underperformed the MSCI USA Index by over 200 percentage points since 2011.

The more moderate moves in consumer staples stocks over the past few years have resulted in compelling valuations, as the MSCI USA Consumer Staples Index only trades at 24.5x earnings, a slight discount to equities in the United States.

Growth and New Trends to Monitor

However, signals in the market in 2026 have changed drastically, as many market participants have begun to favor consumer staples stocks. The consumer staples sector has begun to outperform the S&P 500 this year, which may signal a correction in the S&P 500 in the near future due to valuation, political, or economic concerns.

The Vanguard Consumer Staples Index Fund ETF has already rallied by 16% this year, compared to a similar S&P 500 gain of around only 1%.

Many market participants have begun to wonder whether the market will turn its focus to consumer stocks, abandoning its previous laser focus on tech and AI-themed stocks.

Either way, consumer staples likely have a strong growth outlook ahead of them and have delivered consistent financial performance during multiple economic cycles.

According to Transparency Research, the market is projected to have a circa 4% CAGR through 2035. This growth rate is slightly above the World Bank’s global growth projection of 3.3% for 2026.

While this is nowhere near the double-digit, disruptive growth of the AI industry, it is still a respectable growth rate that should support reasonably valued consumer staples stocks.

Many US consumer staples markets are also very active in other international markets. These global consumer stocks will be able to tap into international markets for new sources of growth to help offset potential slower growth in the United States.

There is still ample room for many leading US consumer staples stocks to expand into foreign markets, as they are less dependent on foreign markets relative to other sectors.

Overall, consumer staples stocks have room for moderate growth in the coming years, and companies that exploit new trends in international markets could stand to benefit.

Options to Consider

Some of the leading consumer staples ETFs to consider include the Vanguard Consumer Staples ETF and the iShares Global Consumer Staples ETF.

The Vanguard Consumer Staples ETF is a solid vehicle for U.S.-focused investors, which invests in some of the leading consumer names in the market.

Investing in consumer names outside of the United States could also be a solid growth strategy, and there are plenty of ETFs available that have diversified holdings in consumer staples stocks outside of the United States.

The iShares Global Consumer Staples ETF is a great starting place for investors who want to diversify outside of the United States and focus on consumer staples stocks in Europe and Asia, too.

There are also several products available for those who want to bet on giant emerging consumer markets in China and India, for example. Two interesting vehicles to check out include the Columbia India Consumer ETF and the China Consumer Discretionary ETF, if you are willing to target consumer discretionary stocks. These two countries collectively account for around 35% of the world’s population and are excellent consumer markets to consider.