Woolworths Group Ltd (ASX: WOW) is looking to Uber Eats to help grow its share price and profit.
It's not that you can start ordering salads or cooked chickens on Uber Eats, but Woolworths subsidiary BWS is now on Uber Eats where customers can get delivered beer, wine and spirits in Melbourne.
BWS has chosen a good time to start doing this, with the AFL grand final weekend here. Indeed, part of the promotion stated "Skip the bottle shop run this Grand Final weekend and get drinks delivered to your door using the Uber Eats app, with an average delivery time of under 30 minutes across Melbourne."
Pretty useful if you don't want to leave the house, or if you've already had a bit to drink.
Woolworths will be sacrificing a some of the profit margin, but hopefully the increased sales volume more than makes up for that.
It's good to see that Woolworths Group is trying something different. Coles Group Limited (ASX: COL) has unveiled a number of different technology investments and partnerships which could drive sales and efficiencies in the future, such as the deal with Ocado.
Woolworths is currently having a dispute with Arnott's, according to the Australian Financial Review. There's always going to be a pricing struggle between the supermarkets and brands, which is why it's important for Woolworths to explore other growth avenues, like this Uber Eats idea.
Foolish takeaway
Woolworths is trading with a grossed-up dividend yield of 3.8%, and it's valued at 25x FY21's estimated earnings. I don't see how the relatively low profit growth over the next few years can justify this high earnings multiple, even if interest rates are low and going lower.
