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Kroger launches an online marketplace to better fight Amazon and Walmart

The online grocery wars are about to get more intense.

Kroger, the largest U.S. operator of grocery stores, said on Monday it is expanding its two-year Kroger Ship program by integrating it with a new marketplace of third-party sellers. The company did specify when it will launch the platform, which will allow the grocer to expand its product selection by 50,000 items.

The move looks to build on the 92% increase in digital sales in Kroger’s first fiscal quarter, and make the company, a relatively late arrival to the online grocery wars, more competitive with Amazon, Target, Costco, and Walmart, all of which also saw their online grocery sales explode during the coronavirus pandemic.

Those chains’ massive general merchandise selections give them a big edge over Kroger’s online assortment, a weak spot the marketplace is intended to mitigate. According to a Deutsche Bank research note, Kroger’s online momentum had further accelerated as of the first few weeks of the current quarter.

“As part of our continuing transformation, we look forward to accelerating the development of our e-commerce platform and providing our customers with even more choices,” said Stuart Aitken, Kroger’s SVP and chief merchant and marketing officer. In addition to its namesake chain, Kroger owns other grocery retailers including Ralphs and Fry’s.

The additional products will include things like housewares and toys, a bid to bringing it a bit closer to rivals Walmart and Amazon in particular, whose assortments of products run in the tens of millions of items. Another benefit of a third-party marketplace, which the grocer is working with tech company Mirakl to build, is that Kroger can offer customers a wider variety of products, many of them non-food, without having to buy the inventory, lessening the changes of being saddled with unsold merchandise it could have to discount.

Kroger’s successful e-commerce push has lifted its stock 20% this year so far.

Source: Fortune


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