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CNBC reports that Kroger is considering the acquisition of online wholesaler Boxed, a deal that if it goes through likely would cost it between $350 million and $500 million. However, the story also says that Boxed anticipates that it will get takeover offers from other retailers as well.

Boxed, which generally is described as being an online Costco, sells bulk groceries and non-edible groceries, in the same way as a membership club, except that there is no membership fee and the site offers free shipping.

The CNBC story points out that “Amazon's $13.7 billion acquisition of Whole Foods Market last year to crack the U.S. grocery market heightened a sense of urgency among rivals looking for ways to counter competition from the world's largest online retailer. Target, for instance, said last month it agreed to buy same-day delivery platform Shipt for $550 million.”

Just FYI … in our first “Innovation Conversation” podcast, Tom Furphy and I interviewed Jackson Jeyanayagam, CMO of Boxed, who did a great job of describing the company and its unique culture. You can listen to it here. Or, you can access it on iTunes or Google Play.
KC's View:
This is very, very interesting … especially when seen within the context of Walmart’s decision to close down more than 60 Sam’s stores and turn 10 of them into e-commerce distribution centers.

I have to wonder how many companies might bid for Boxed, and how many of those might make the move from a defensive posture now that they know Kroger is interested. Would Walmart be interested, since it already has gone on record as saying that the traditional warehouse club business is giving way to an e-commerce model?

I do worry that some of the cultural factors that make Boxed unique will fall to the wayside under different ownership. Benefits like college tuition for all employees’ immediate family members probably won’t be long for this world if a sale takes place.

That said, a sale of Boxed - or at the very least, a sizable investment by a major retailer - strikes me as inevitable.