Grocery-anchored net lease is the definition of essential retail, and Publix and Kroger are its two most instructive credits. Kroger is the largest pure-play US grocer and a formally rated investment grade tenant at BBB/Baa1. Publix is something rarer: an employee-owned private company with no rating at all, whose balance sheet and operating history are so strong that the market underwrites it like a high-grade credit anyway. Comparing them shows exactly how much a rating letter is worth, and when it isn’t the thing that matters.
Below we compare credit, cap rates, lease structure, store footprints, and growth, and run the bond-to-NNN pivot on the side of the pair that actually issues bonds. For the framework behind the BBB‑/Baa3 cutoff we reference throughout, see our investment grade guide.
Publix vs Kroger: Head-to-Head NNN Metrics
| Metric | Publix | Kroger |
|---|---|---|
| S&P / Moody’s Rating | Not Rated (private, employee-owned) | BBB / Baa1 |
| Ownership | ESOP + Jenkins family since 1930 | Public (NYSE: KR) |
| US Store Count | 1,432 (Q1 2026) | ~2,700 (incl. Fred Meyer, Harris Teeter) |
| Annual Revenue | ~$60B+ (est. FY2024) | $150.0B (FY2024) |
| Cap Rate Range | 5.25%–6.25% | 5.0%–6.25% |
| Typical Lease Term | 15–25 years (NNN or ground lease) | 20 years |
| Guarantee | Corporate (Publix Super Markets, Inc.) | Corporate (The Kroger Co.) |
| Typical Building Size | 45,000–55,000 SF | Big-box supermarket formats |
| Typical Price Range | $8.0M–$20.0M | $8.0M–$20.0M |
| Core Geography | FL (889), GA (221), AL, SC, TN, NC, VA, KY | National, 35 states |
Data from InvestmentGrade.com tenant profiles as of mid-2026. Grocery cap rates vary widely with lease vintage, sales-to-rent ratios, and whether the deal is fee-simple or ground lease.
Credit Comparison: A Rating Letter vs a 95-Year Balance Sheet
Kroger’s BBB/Baa1 profile is the textbook mid-investment-grade grocery credit: $150 billion in revenue, roughly 2,700 stores, national scale, and public-market transparency. The credit overhang of the last cycle, the proposed $25 billion Albertsons merger, was definitively blocked in December 2024 and terminated, removing both the strategic uncertainty and the leverage risk the deal would have carried. Kroger today is a cleaner credit story than at any point in the last five years.
Publix has no rating because it has never needed debt markets. The company is one of the largest employee-owned businesses in America, has never had a layoff in its 95-year history, and internally funds a store base of 1,432 locations concentrated in the fastest-growing region of the country. In sales per square foot and customer loyalty metrics, Publix consistently leads the entire supermarket industry. Buyers underwriting a Publix guarantee are underwriting an unleveraged balance sheet most BBB issuers would envy. Where each grocer ranks against the rated tenant universe is tracked in our credit tenant ratings index.
Cap Rate Analysis: Nearly Identical Pricing, Different Reasons
The two ranges overlap almost completely: Kroger at 5.0%–6.25% and Publix at 5.25%–6.25%. That overlap hides different drivers. Kroger’s tightest prints come from strong-sales stores with long term remaining in dense metros; its widest come from older, flat-lease vintages in secondary markets. Publix pricing is driven less by store performance dispersion, which is unusually low, and more by lease structure: Publix-anchored deals frequently involve shorter remaining primary terms or shadow-anchored centers, and pure single-tenant fee-simple Publix boxes are scarce and bid tightly when they appear.
The practical read for buyers: neither credit offers a systematic yield premium over the other. The deal-level variables, remaining term, rent basis, sales-to-rent ratio, and real estate quality, decide value in grocery more than the tenant name does.
Lease Structure: The Real Differentiator
Kroger signs 20-year corporate NNN leases, with escalations that vary by vintage, often flat in the primary term or tied to percentage rent on older paper, which is why remaining term and rent basis dominate Kroger underwriting. Publix terms run 15–25 years across NNN and ground lease structures, and Publix is famous for actually exercising its options: stores stay, get remodeled, and renew. Both guarantees are full corporate obligations, not shell-entity or franchisee paper.
One structural note on grocery boxes generally: at 45,000–55,000 square feet, residual analysis matters more than with a QSR pad. A dark grocery box is a real re-tenanting project. The mitigant for both tenants is behavioral, and Publix and Kroger both close stores at among the lowest rates in the sector.
Footprint and Growth
Kroger’s 2,700 stores span 35 states under multiple banners, giving buyers geographic choice and a deep resale market. Post-merger-termination, Kroger has redirected capital toward store remodels, digital fulfillment, and buybacks, steady-state behavior a landlord likes. Publix keeps compounding in one region: 889 of its 1,432 stores are in Florida, the single strongest population-growth story among large states, and its expansions into Georgia, the Carolinas, Tennessee, Virginia, and Kentucky follow the same migration corridors driving 1031 buyer demand for Southeast real estate broadly.
Bond-to-NNN Pivot: The Kroger Spread
Kroger issues investment grade bonds, so we can price the same credit two ways. Kroger’s intermediate corporate bonds have recently yielded in the low-to-mid 5% area, while Kroger NNN real estate trades at 5.0%–6.25%, meaning the real estate delivers a comparable-to-positive spread on the identical corporate obligation before counting what bonds can never offer: depreciation deductions, 1031 exchange deferral, rent escalations on newer paper, and residual land value. The full after-tax math is worked through in our Kroger bonds vs NNN analysis. Publix offers no such pivot; with no public debt, its real estate is the only Publix credit instrument money can buy, the same scarcity dynamic that supports Wawa and Chick‑fil‑A pricing.
Verdict: Which NNN Investment Wins?
Choose Kroger if you want a formally rated, nationally diversified credit with a deep listing supply, a liquid resale market, and a bond benchmark that makes underwriting transparent. Choose Publix if you prioritize operator quality and demographic tailwind over a rating letter and can compete for scarcer product in the Southeast. For most 1031 buyers the decision comes down to the specific lease in front of them: a high-sales Kroger with 15+ years of term is a better deal than a short-term Publix, and vice versa. The tenant rivalry is a tie; the lease decides it.
Publix vs Kroger NNN: Frequently Asked Questions
Is Publix investment grade?
Publix carries no S&P, Moody’s, or Fitch rating because it is private, employee-owned, and issues no public debt. Nothing exists for the agencies to grade. Its financial strength, scale, and 95-year operating history lead the net lease market to underwrite Publix comparably to high-grade rated tenants.
What credit rating does Kroger have?
Kroger is rated BBB by S&P and Baa1 by Moody’s, solidly investment grade. The terminated Albertsons merger removed the main ratings overhang, and Kroger’s $150 billion revenue base supports a stable mid-BBB profile.
What are typical cap rates for Publix and Kroger NNN properties?
Publix-anchored assets trade around 5.25%–6.25% and Kroger assets around 5.0%–6.25% in 2026. Remaining lease term, rent basis, and store sales drive pricing within those ranges more than the tenant name does.
Why are Publix NNN properties hard to find?
Publix often controls its real estate or anchors centers held by institutional owners, so single-tenant fee-simple Publix listings are scarce. When they surface, the combination of Southeast population growth and unleveraged corporate credit draws heavy 1031 competition.
Should I buy Kroger bonds or a Kroger NNN property?
Kroger bonds recently yield in the low-to-mid 5% area while Kroger real estate trades at 5.0%–6.25% on the same corporate credit, and the property adds depreciation, 1031 exchange eligibility, escalations on newer leases, and residual land value that bonds cannot provide. Bonds win on liquidity; the real estate typically wins after tax.
Weighing a grocery-anchored deal? We underwrite Publix and Kroger leases against live comps, sales-to-rent benchmarks, and residual scenarios before you commit. Request a buyer consultation for a no-obligation review of any listing you are tracking.
