Goodfood Marketplace (TSX:FOOD) jumped 11% on Monday, as the company announced one-hour delivery would begin in Ottawa.
Goodfood stock will now offer its one-hour grocery delivery service in the Greater Ottawa Region, the company said in a statement on Monday. The move means Goodfood customers can now take advantage of the company’s grocery offerings, receiving their items within an hour.
Shares of Goodfood stock jumped 11% at the news. It was a big move, as the company has been falling at a steady rate since August of last year. Yet in the beginning of March, there has been some positive momentum, as the markets started to recover, and earnings get closer.
Earnings are clearly why Goodfood stock took this opportunity to announce the delivery service. But it was clearly more than just a new city getting fast delivery that made shares rise. Management also detailed its Dynamics 365 partnership with Microsoft. The technology allows the company to manage its supply-chain effectively to “maintain a customer-centric focus, and increase profitability.”
“With Dynamics 365, our team is able to focus on value-added tasks like sourcing new farms and artisanal producers that are key to the offering… This partnership and approach is one of the many initiatives driving out constant consumer-focused evolution and innovation in the grocery industry.”Jonathan Ferrari, Goodfood chief executive officer
Furthermore, while the headline may say Goodfood stock offers a free delivery service, investors will be happy to note this is only for 90 days. Afterwards, a subscription of $5.99 per month can be purchased, or $2.99 per order. That offers further subscription revenue for the company to unlock.
As mentioned, this is all before the company’s earnings report this week. During the last earnings report, Goodfood stock dropped after reporting a substantial increase in the company’s losses. Meanwhile, sales were slightly lower than the year before, though its customer count continues to grow.
Offering these new services will hopefully bring more customers back to Goodfood stock. The success of Ottawa after the launch in Toronto and Montreal could mean the company has a new revenue stream that could see stable income come. However, time will tell during the next earnings report.
Goodfood stock continues to have a target price of $3.89. That represents a potential upside of 18% as of writing.