Market Overview

Morgan Stanley Agrees With Grocery Outlet CEO On E-Commerce

Morgan Stanley Agrees With Grocery Outlet CEO On E-Commerce

The extreme value grocery chain Grocery Outlet Holding Corp (NASDAQ: GO) has no plans to make a major push into e-commerce — a decision Morgan Stanley analysts agree with.

Grocery Outlet CEO: 'TJ Maxx Of Grocery'

Grocery Outlet is best described as the "TJ Maxx of grocery," as it targets consumers looking for "great deals" of 40-70% off frozen, fresh, produce and other products, CEO Eric Lindberg said on CNBC's "Mad Money" Friday.

The lower price proposition gives a leg-up against competitors, and there are no "immediate plans" for Grocery Outlet to make a push toward the online segment, he said. 

Grocery Outlet doesn't believe consumers will find a similar shopping experience online as they do in the store, the CEO said. Perhaps more importantly, Lindberg said he doesn't think rival grocers are making money in the online space by delivering food.

Morgan Stanley: 'Treasure Hunt' Store

Grocery Outlet offers consumers a "treasure hunt" experience in stores, and its entire business is built around its physical stores, Morgan Stanley analyst Simeon Gutman said in a Sunday note.

Granted, Grocery Outlet isn't immune to growing e-commerce penetration, especially with a customer base that spans income ranges and demographics, the analyst said. 

Over the next three to five years, Grocery Outlet could be forced to invest in an online presence, which would impact margins, Gutman said.

This should not be considered a "major risk," as overall online grocery penetration is still low, standing at an estimated 3% to 4%, according to Morgan Stanley.

Morgan Stanley has an Equal-weight rating on Grocery Outlet with a $39 price target. 

Grocery Outlet shares were trading 0.15% higher at $32.50 before the close Monday. 

Related Links:

2 Grocery Outlet Analysts Remain Sidelined Despite Praising Q3 Print

Grocery Outlet Trades Lower On Mixed Q3 Preliminary Results

Latest Ratings for GO

Nov 2020Morgan StanleyMaintainsEqual-Weight
Aug 2020DA DavidsonInitiates Coverage OnBuy
Aug 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for GO
View the Latest Analyst Ratings


Related Articles (GO)

View Comments and Join the Discussion!

Posted-In: e-commerce food Grocery Morgan Stanley Simeon GutmanAnalyst Color Analyst Ratings Media Best of Benzinga

Latest Ratings

MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at