Kroger (NYSE: KR) might not be the hottest name in grocery stores. That title would belong to Whole Foods Market (NASDAQ: WFM). The rise of Whole Foods has everything to do with the ideal combination of natural and organic foods being sold in high-income areas. However, this doesn't necessarily mean that Whole Foods is likely to be a better long-term investment than Kroger.

It might sound as though this story is being angled toward Kroger being a better investment, but that's not true. There is no "better investment" here. It really comes down to your investing style and risk tolerance. If you look at some important key stats and trends, it's relatively clear what each company should offer you from an investing standpoint going forward. The primary focus of this article will be on Kroger, but we'll get back to Kroger versus Whole Foods comparisons very soon.

Customer first
Kroger has methodically driven its top line in the past several years, which has had a lot to do with its "customer first" strategy. Using this strategy, Kroger looks at customer feedback and makes necessary improvements in order to increase its customer loyalty base. Once it has those new customers, it will do everything it can to make sure it doesn't let them go to a competitor.

Based on recent customer feedback, Kroger continues to improve in many areas, including product selection, faster shopping experience, and value. Kroger has also geared its talent search toward innovative minds in order to increase its corporate brand offerings and to gear those offerings toward changing consumer desires. Currently, approximately 25% of the company's units sold are corporate brands.

Now let's take a look at some recent results and future expectations to see how effective the company's customer-first strategy has been lately.

Recent results and expectations
Kroger recently reported its third-quarter results. Total sales increased 3.2% to $22.5 billion year over year, and comps (excluding fuel) improved 3.5%. Excluding items, earnings per share jumped 15% to $0.53.

These are all good numbers, but Kroger did state that it sees a slowly improving yet fragile economy based on consumer trends. The good news is that based on Halloween and Thanksgiving holiday sales, the company is confident about its fourth quarter. Kroger expects fourth-quarter sales growth of 3% to 3.5%.

Over the long haul, Kroger aims for 8% to 11% EPS growth. For fiscal year 2013, it expects $2.73 to $2.80. This is solid, but analysts' consensus was $2.80.

All these numbers being thrown around can lead to confusion. So let's take a look at the most important numbers, which offer more clarity. 

Kroger versus a rising trend
First take a look at the revenue comparison chart below for Kroger, Whole Foods, and Sprouts Farmers Market (NASDAQ: SFM):

Kroger revenue (trailing-12 months) data by YCharts.

Whole Foods is growing slightly faster than Kroger on the top line. Sprouts Farmers Market was included to indicate the strength of natural and organic foods in today's consumer market. The rise of the health-conscious consumer has led to companies like Sprouts Farmers Market growing quickly on the top line. 

The problem with Sprouts Farmers Market from an investing standpoint is that it's trading at 63 times forward earnings. Therefore, you must pay an extreme premium for it versus Kroger and Whole Foods, which are trading at 13 and 28 times forward earnings, respectively. Therefore, let's focus on Kroger and Whole Foods.

Remember that Whole Foods is located primarily in high-end areas. According to data just released by the Federal Reserve, the wealthiest 10% of Americans own 80% of stocks. A good portion of high-end consumers' income comes from stocks. If that's the case, then what do you think would happen to Whole Foods' sales if the stock market faltered?

Put simply, while Whole Foods offers more growth potential than Kroger thanks to targeting the health-conscious consumer in high-end markets, it's unlikely to be as resilient. Kroger offers a wide range of retail brands, targeting various types of consumers. This diversification gives it more resiliency.

It also yields 1.6%, whereas Whole Foods yields 0.9%. Year to date, Kroger has returned $752 million to its shareholders in the way of dividends and buybacks. Considering the company generates annual operating cash flow of around $3.4 billion and approximately $1.7 billion in free cash flow, continued capital returns to shareholders are likely.

Also consider Kroger's consistent ability to drive its top line faster than SG&A expenses:

Kroger revenue (trailing-12-month) data by YCharts.

That's the sign of a healthy company.

The bottom line
If you're looking for growth, then you might want to look into Whole Foods. Just keep in mind that it's highly reliant on the high-end consumer, which partially relies on investments for income. Kroger isn't likely to grow as quickly. It's more of a steady investment that offers resiliency and should offer long-term rewards, partially through dividends and stock buybacks.