The companies have been in talks for nearly a year.
We live in an age of grocery store mergers: take, for example, Amazon’s acquisition of Whole Foods, which made two behemoth companies even bigger. Now, we may have another merger on our hands: Target and Kroger may combine forces.
According to an exclusive report from Fast Company, Target and Kroger have been talking about a potential merger or partnership since last summer—a move that could boost Target’s grocery sales while also enticing Kroger’s customers into its merchandise aisles and onto its website.
A Target-Kroger business would be a big one—and not just for their customers. The brand’s combined annual revenue last year was $195 billion.
Last year, Amazon purchased Whole Foods for $13.7 billion. As Fast Company points out, that merger has forced many companies to reevaluate their business strategies, especially when it comes to e-commerce. Albertson’s, Publix, and Stop & Shop have all partnered with Instacart to offer online grocery shopping to patrons, while Walmart has teamed up with Google Home to allow its shoppers to order voice-activated home shopping to compete with Amazon’s Alexa.
These moves make a lot of sense: Fast Company cites data from the Food Marketing Institute and Nielsen that show some 70 percent of grocery shoppers will buy their groceries online within the next the five to seven years. Those same stats also show the online food and beverage industry could make as much as $100 billion by 2022.
Brittain Ladd, a digital supply chain consultant, strongly believes the merger should go through: he’s argued that with the merger, “Kroger could design and implement a best-in-class grocery solution for Target. … Kroger and Target could create a general merchandise and grocery strategy that would benefit Target and Kroger customers.”