Grocery Outlet’s inability to grow online is a ‘competitive disadvantage’ that will be hard to overcome

Grocery Outlet’s inability to grow online is a ‘competitive disadvantage’ that will be hard to overcome

Quo Vadis says the company’s model is “maladapted,” and rate the stock sell. “Bulls want Grocery Outlet to be a long-term high-ROIC compounder with an enormous total addressable market. This is simply not the case,” wrote John Zolidis, president of Quo Vadis. “There is no ‘white space’ where consumers do not already have options to buy discounted food. Grocery Outlet will have to enter new markets where its brand is unknown, consumer preferences are different, and entrenched competitors are in place with superior real estate. It’s not going to be easy.”

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