The new partnership between Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) and J Sainsbury PLC (LSE:SBRY) marks a “positive development” for the delivery company and warrants a ‘buy’ rating, according to Deutsche Bank.
Analyst Silvia Cuneo said the takeaway delivery company gaining further access to the grocery sector "is accretive to growth," and is "attractive to expand into to leverage the existing user base in our view", with lower market penetration for groceries compared to takeaway food currently.
She noted Just Eat continues "privileging the capital light approach to expand into adjacent on-demand categories," Cuneo added, referencing its existing deals with Asda and the Co-op.
Following an announcement on Monday, the deal will see Just Eat deliver groceries from 175 Sainsbury’s stores across London, Edinburgh and Bristol by late February, before expanding the service across the UK throughout the rest of this year.
Analysts at AJ Bell also noted that Sainsbury’s was motivated to agree the deal as it “cannot afford to stay on the side lines,” as the other ‘big four’ supermarkets already offer such a rapid-delivery service.
Sainsbury’s saw its share price rise 1.8% on Monday, from 240.7p to 245p, following the news, while Just Eat fell 1% from 2,136p to 2,113.5p.
Early trading on Tuesday saw Just East fall 0.5% to 2,110.5p, while Sainsbury’s was largely unchanged.