Back to top

Here's What You Should Know About Supervalu-Instacart Deal

Read MoreHide Full Article
Supervalu Inc. (SVU - Free Report) has inked a reseller deal with Instacart to provide its retailers with the facility of online shopping and delivery services. The option will be available to more than 3,000 independent retail stores that are catered by Supervalu. Also, these services will be open to other U.S. retailers, spanning in more than 240 metro areas where Instacart operates.  
 
Supervalu’s digital marketing services, along with Instacart’s e-commerce platform (which entails limited capital expenditure) will help its retailers expand their customer base without any additional labor cost. Also, the deal with Instacart, is likely to offer Supervalu’s retailers benefits like contracted pricing, marketing skills and placement on Instacart.com.
 
Given the increasing needs of consumers, Instacart comes with the advantage of same-day grocery delivery or in-store pickup services, which will further boost Supervalu’s e-commerce operations. This looks like one of the strategic efforts undertaken by the company to improve performance of its retail business. 
 
Well, this Zacks Rank #5 (Strong Sell) company has been grappling with softness in retail segment for a while now, owing to stiff competition, price competition and intense promotions. Notably, during the fourth-quarter of fiscal 2018, net sales in retail dropped 0.6% to $690 million, due to store closures partially offset by a 0.1% gain in identical store sales. Also, adjusted operating margin in the segment declined year over year as a result of lower base margins and increased shrink costs.  
 
These issues have compelled the company to adhere to store closures and streamline retail operations, significantly. Earlier this month, Supervalu unveiled a proposal (the “Holding Company Proposal”) to rearrange its corporate structure into a holding company setup. SUPERVALU took this initiative to organize and make further distinctions between its wholesale and retail operations, in a planned and more efficient way. The company also plans to segregate its liabilities into respective wholesale and retail segments.
 
Let’s see if such initiatives can help revive Supervalu’s stock that has dipped 2% in the past year, while the industry declined 12.2%.
 
 
Looking for More Promising Food Stocks? Check These
 
Medifast Inc (MED - Free Report) , a Zacks Rank #1 (Strong Buy) stock, has a long-term earnings per share growth rate of 15%. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
The Chef’s Warehouse, Inc. (CHEF - Free Report) , a Zacks Rank #2 (Buy) stock, has a long-term earnings per share growth rate of 22%.
 
Tate & Lyle Plc. (TATYY - Free Report) , a Zacks Rank #2 stock, has a long-term earnings per share growth rate of 3.1%.
 
Will You Make a Fortune on the Shift to Electric Cars?
 
 Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
 
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
 
It's not the one you think.
 



In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


The Chefs' Warehouse, Inc. (CHEF) - free report >>

MEDIFAST INC (MED) - free report >>

Tate & Lyle PLC (TATYY) - free report >>

SUPERVALU INC. (SVU) - free report >>

More from Zacks Analyst Blog

You May Like