Kroger (KR) is teaming up with the online grocery platform Instacart to offer a new delivery service designed to enhance the shopping experience. Kroger Delivery Now is the new service that will make it easy for customers to shop for fresh groceries and other household essentials and have orders delivered in as fast as 30 minutes. KR shares fell 2.54% to close at $41.79 on September 14.
Kroger is a U.S. retailer that operates a combination of food and drug stores, multi-department stores, and price impact warehouses.
The new service will use Kroger’s existing network of more than 2,700 stores to create a unique virtual convenience experience. The ultimate goal is to ensure faster deliveries from Kroger family stores to benefit customers. Customers will have their orders delivered in as fast as 30 minutes.
Under the new service, Kroger will not require customers to make any trade-off on selection, quality, or even price. Instead, customers should be able to place orders from a portfolio of 25,000 items that combines all customers’ favorites with easy doorstep delivery.
According to Kroger CEO Rodney McMullen, Kroger Delivery Now should reach up to 50 million households as they move to provide one more way to shop while affirming the importance of convenience. (See Kroger stock charts on TipRanks)
“Last year, Kroger achieved more than $10 billion in e-commerce sales, and we’re committed to doubling both our digital sales and profitability rate by the end of 2023 and expect Kroger Delivery Now will help us reach that target,” said McMullen.
Additionally, Instacart has confirmed the launch of Convenience Hub, which will allow customers to shop for convenience essentials around the clock, with delivery in as fast as 30 minutes.
Recently Barclays analyst Karen Short reiterated a Sell rating on the stock and raised the price target to $37 from $35, implying 11.46% downside potential to current levels.
Consensus among analysts is a Hold based on 3 Buys, 11 Holds, and 3 Sells. The average Kroger price target of $40.88 implies a 2.18% downside potential to current levels.