The intensifying competition in the U.S. grocery market has compelled supermarket chains to constantly revisit their strategy in order to endure the same. The Kroger Co. (KR - Free Report) has been steadily creating a niche in the burgeoning grocery business. The latest addition to the list of initiatives is its partnership with the pharmacy-led health and wellbeing company, Walgreens Boots Alliance, Inc. (WBA - Free Report) .
Under this partnership a pilot program will be launched at selected 13 Walgreens outlets in Northern Kentucky. The primary motive of this program is to provide convenience to customers by creating “one-stop shopping experience”, whereby they can avail products and services of both Kroger and Walgreens. Per management, customers ordering Kroger grocery items online can pick them up at the Walgreens’ outlets.
Kroger also informed that customers visiting the drug retailer's stores can also shop from its popular 'Our Brands' grocery range, including the natural and organic brand — Simple Truth. Adding the 'Our Brands' portfolio will allow Walgreens to diversify its products and service offerings.
To counter the threat emerging from other prominent players such as Amazon (AMZN - Free Report) , Walmart (WMT - Free Report) and Target (TGT - Free Report) , Kroger has been trying to exploit every nook and cranny. From speedy deliveries to payment systems and from selling grocery to offering meal-kits, this supermarket chain is leaving no stone unturned.
The company’s deal with Nuro — the maker of driverless road vehicle — to deliver groceries at customers’ door steps using autonomous vehicles is one of the initiatives it has undertaken to overcome competition. Apart from this, the company’s deal with the Ocado, an online grocery delivery company, along with the acquisition of Home Chef, a meal kit provider, is definitely a good move to stay abreast in the race. The company also launched a grocery delivery service “Kroger Ship”.
Certainly, Kroger is trying all means to attract consumers and attain incremental revenues. The company remains on track to boost market share by introducing new items, digital coupons, and order online, pick up in store initiative. We believe that these strategies are likely to bolster the company’s performance and drive the stock further.
In the past six months, shares of this Zacks Rank #3 (Hold) have increased 21% comfortably outperforming the industry that advanced roughly 10%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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