Discount supermarkets chain operator Grocery Outlet Holding Corp. (GO) has partnered with online grocery platform Instacart for a pilot program that aims to make its bargain shopping service available online.
Shares of the company closed 2% up on Thursday and gained another 1.5% in extended trade to end the day at $23.86. (See Insiders’ Hot Stocks on TipRanks)
Headquartered in California, Grocery Outlet offers overstocked, discounted and closeout products from private label suppliers and name brands. It operates stores in Pennsylvania, Nevada, Idaho, Washington, Oregon and California.
The company plans to run the pilot program for six months at 68 of its stores in California. As part of the program, staple products and daily essentials from its stores will be available for same-day delivery via Instacart.
The CEO of Grocery Outlet, Eric Lindberg, said, “The pandemic has changed the retail experience and how people shop — advancing E-commerce by a decade in just a year and a half. We think it’s important to make our great-value products available across another platform and to a greater audience, introducing Grocery Outlet to customers who may not have shopped with us before.”
The President of Instacart, Carolyn Everson, said, “Customers can now have Grocery Outlet’s unparalleled selection of affordable groceries and pantry staples delivered from the store to their door in as fast as an hour.”
Last month, Berenberg Bank analyst Brian McNamara maintained a Buy rating on the stock with a price target of $33 (40.4% upside potential). The analyst expects the company to report earnings of $0.21 per share in the third quarter.
Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 5 Holds. The average Grocery Outlet Holding price target of $34.90 implies 48.5% upside potential. Shares have lost 43.8% over the past year.
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