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Barron’s reports that UBS analysts are predicting that if Kroger were to stop charging for its grocery delivery service, it would take a significant hit to its earnings.

“While we don’t expect Kroger to change its fee structure in the near term, we believe there’s a chance it may revisit it in the next few years,” UBS analysts wrote, “citing free pickup offers from Walmart and Amazon.com’s Whole Foods.”

However, the analysts also argue that if Kroger were to move to free delivery, it could “offset some of this (economic) pressure through greater automation and best practices learned from Ocado,” with which it recently struck a deal to adopt its robotic warehouse technology.
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