CHICAGO and BOISE, Idaho - Grubhub (LSE: JET, AMS: TKWY) and Albertsons (NYSE:ACI) Companies, Inc. (NYSE: ACI) announced a partnership today that will allow for delivery from nearly 1,800 Albertsons Cos. stores through the Grubhub Marketplace.
This collaboration includes a variety of Albertsons banners such as Safeway, Vons, and Jewel-Osco, among others, with availability depending on delivery locations accessible via the Grubhub app and website.
Craig Whitmer, vice president of new verticals at Grubhub, expressed enthusiasm for the expansion of their grocery offerings, highlighting the convenience and choice this partnership will provide to customers. He emphasized the benefit of having a wide array of products delivered directly to customers' doors.
Amber Kappa, vice president of business development and digital innovation at Albertsons Cos., echoed the sentiment by emphasizing the company's commitment to convenience, choice, and variety. She noted that the partnership with Grubhub aligns with these values by facilitating the delivery of fresh produce and household essentials from their stores to customers' homes.
The partnership also extends to Grubhub+, the delivery platform's loyalty program, which offers unlimited $0 delivery fees on eligible orders. Albertsons Cos. is the first national grocery retailer to join Grubhub following its previous collaboration with Mercato, a platform for independent grocers.
Grubhub has been actively diversifying its product offerings to include grocery and convenience partners, as well as enhancing its merchant menu capabilities to accommodate a larger number of images and items.
Grubhub, a part of Just Eat Takeaway.com, is a prominent food ordering and delivery service in the U.S., connecting diners with local restaurants and improving the food ordering experience with innovative technology.
Albertsons Companies is a major food and drug retailer in the U.S., operating a wide range of well-known supermarket brands across the country. The company has made significant contributions to community support, including more than $350 million in food and financial assistance in 2023 through the Albertsons Companies Foundation.
This partnership is based on a press release statement from Grubhub, and it represents a strategic move for both companies in the evolving landscape of grocery and food delivery services.
In other recent news, Albertsons Companies Inc. has been the focus of multiple analyst revisions and substantial company developments. Roth/MKM upgraded their stance on Albertsons, moving from Neutral to Buy, in light of a new divestiture package that includes 166 additional stores, increasing the likelihood of a pending deal's approval.
RBC Capital, however, reduced Albertsons' price target to $22 while maintaining an Outperform rating. This decision reflects a modest increase in projected same-store sales for 2024 and an updated 2024 adjusted EBITDA forecast.
Evercore ISI maintained its "In Line" rating and $22.00 price target for Albertsons, acknowledging the company's ongoing customer retention strategies and growth in the pharmacy sector. Albertsons has also agreed to sell an additional 166 stores to C&S Wholesale Grocers to secure regulatory approval for their $25 billion merger with Kroger (NYSE:KR) Co. This move addresses antitrust concerns and is part of an amended agreement.
Despite the increased number of stores being divested, there remain concerns about the effectiveness of the remedy due to C&S's lack of significant operational experience. These recent developments highlight the evolving landscape for Albertsons as it navigates through the fiscal year and the potential impacts of its proposed merger with Kroger.
InvestingPro Insights
As Albertsons Companies, Inc. (NYSE: ACI) forges a new partnership with Grubhub to enhance its delivery services, investors may find it valuable to consider key financial metrics and expert analysis. According to InvestingPro data, Albertsons boasts a robust market capitalization of $11.43 billion, reflecting its significant presence in the retail sector.
The company's P/E ratio stands at an attractive 8.79, suggesting that the stock could be trading at a low earnings multiple compared to its peers. This is further supported by an adjusted P/E ratio for the last twelve months as of Q4 2024, which is even lower at 7.58.
Albertsons also shows a commitment to returning value to shareholders, indicated by a high shareholder yield, which is one of the insightful InvestingPro Tips for the company. This could be particularly appealing for those looking for steady income in addition to growth potential.
Moreover, another InvestingPro Tip highlights that Albertsons is a prominent player in the Consumer Staples Distribution & Retail industry, which may reassure investors of its market position amidst the competitive landscape of grocery and food delivery services.
For those interested in further analysis and additional tips, InvestingPro offers a suite of in-depth metrics and expert insights. There are 6 more InvestingPro Tips available for Albertsons, which can be accessed through the InvestingPro platform at: https://www.investing.com/pro/ACI. To enrich your investment strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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