Kroger is America’s number one grocer. In the current market, companies like Wal-Mart and Amazon.com are fighting to take share away from Kroger, especially in the rapidly developing online grocery market. Kroger is fighting back by purchasing Ocado, a British online supermarket. In the U.K. 6% of food sales are online. If Kroger can increase Americans’ share of grocery sales online from 2% to 6%, it will be a major victory. According to The WSJ’s Logistics Report:
Supply Chain Strategies
The grocery-delivery business has a new market leader, and the surprise is that it’s not Amazon or Walmart Inc. Kroger Co.’s stake in British online supermarket Ocado changes the competitive landscape for an increasingly lively part of the retail landscape, the WSJ’s Stephen Wilmot writes, and gives the largest grocery chain in the U.S. an edge that will draw a response from its rivals. Americans currently buy just 2% of their food online, typically packaged products with long shelf lives. Perishables delivery is much more developed elsewhere, and roughly 6% of food sales in the U.K. are online. Getting to that share in the U.S. will mean building much more logistics infrastructure—like the 20 new warehouses that will come in the Kroger-Ocado deal. That suggests competition in the grocery business may become more focused on distribution networks than on supermarket aisles.
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