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The Street has a story saying that Kroger and retailer-owned cooperative Ace Hardware “are in preliminary talks to form a partnership” under which Ace would create a store-within-a-store in some Kroger units.

According to the story, “Ace operates 5,830 stores across the U.S. Under the cooperative corporate structure, every storefront is independently run — like a franchise — and the local owners own company stock, which grants them voting rights in the cooperative.

“The store-within-a-store concept is nothing new to Ace. Since 2012, it has offered local store owners $150,000 to adopt the model, in which stores of 5,000 square feet or less and can be located inside grocery or paint stores. Ace has a partnership, for instance, with paint chain Benjamin Moore. It has at least 400 express stores, according to the latest data available. If the Ace set-up with Kroger goes through, the grocer would be Ace's biggest partnership according to the source with knowledge of the deal.”
KC's View:
No reason I can think of that this cannot work. It is all about creating a more relevant and resonant shopping experience, and so with thoughtful integration and a laser-like focus on customers, this could make a lot of sense for both parties.