CREATE TABLE #TEMP 
(
GROUPINGID INT ,
DESCRIPTION VARCHAR(MAX)
)
INSERT INTO #TEMP
SELECT 2,'Hat red' UNION ALL
SELECT 2,'Hat green' UNION ALL
SELECT 2,'Hat yellow' UNION ALL
SELECT 3,'Yellow Mens Sweater' UNION ALL
SELECT 3,'Green Mens Sweater' UNION ALL
SELECT 4,'ENDURO STYLE GRIPS BLUE' UNION ALL
SELECT 4,'ENDURO STYLE GRIPS RED' UNION ALL
SELECT 4,'OURY STD GRIP/BLACK/LOW FLANGE' UNION ALL
SELECT 5,'PLEXUS  1/2 OUNCE' UNION ALL
SELECT 5,'PLEXUS 7 OUNCE' UNION ALL
SELECT 5,'PLEXUS 13 OUNCE'

GROUPINGID	DESCRIPTION
2	Hat red
2	Hat green
2	Hat yellow
3	Yellow Mens Sweater
3	Green Mens Sweater
4	ENDURO STYLE GRIPS BLUE
4	ENDURO STYLE GRIPS RED
4	OURY STD GRIP/BLACK/LOW FLANGE
5	PLEXUS  1/2 OUNCE
5	PLEXUS 7 OUNCE
5	PLEXUS 13 OUNCE

Expected output:

groupid         description
2               Hat
3               Mens Sweater
4		NULL  (this is null because the same word is not repeated in all rows)
5		PLEXUS OUNCE

;WITH cte AS
(
	SELECT * FROM 
	(
		SELECT
			*,
			COUNT(Item) OVER (PARTITION BY Item,GroupingID) AS N1
		FROM
			(SELECT *,count(*) OVER (PARTITION BY GroupingID) AS N0 FROM #temp) AS t
			CROSS APPLY dbo.DelimitedSplit8K(t.[DESCRIPTION],' ') dsk
	) s
	WHERE s.N0 = s.N1 
)
SELECT
	a.GroupingId,
	LTRIM(d.Descriptions) AS Descriptions
FROM 
	(SELECT DISTINCT GroupingId FROM  #temp ) AS a
	OUTER APPLY
	(
		SELECT ' '+Item
		FROM 
		( 
			SELECT DISTINCT groupingID, Item FROM cte b 
			WHERE b.GroupingId = a.GroupingId
		) c
		FOR XML PATH('')
	) d(Descriptions)

10 KG FLEECE 10 KG FLEECE LINED HELMET BAG - RE
10 KG FLEECE LINED HELMET BAG - PU
FLEECE 10 LINED KG - BAG HELMET RX