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Kroger announced yesterday that it is testing a new alliance with Walgreen that will allow customers to order groceries from Kroger online and then pick them up at a Walgreen drugstore.

In addition, the Cincinnati Enquirer reports, the two retailers will test out the sale each one’s private label products in the other’s stores.

The arrangement is being tested out at 13 Walgreen stores in Northern Kentucky, close to Kroger’s Cincinnati headquarters. If it works, the goal is to roll it out nationwide.

“This exciting collaboration aligns with Kroger’s vision of serving America through food inspiration and uplift,” Rodney McMullen, Kroger’s chairman/CEO, said in a prepared statement. “This concept brings together the best of two great brands to rethink convenience and redefine the way America shops for food.”

In its coverage, CNBC writes that “the deal is the latest in a series of partnerships and combinations in which retailers have sought to offer new products and services as shopping habits change. Pharmacies like Walgreens have been losing sales of household products like shampoo that they can buy at conveniences stores or online. Grocers like Kroger are looking to add service and distinction as they compete against the powerful union of Amazon and Whole Foods.

“Examples include CVS Health's planned $69 billion acquisition of health insurer Aetna and Walmart's partnership with health insurer Anthem.” CVS also is running all of the pharmacies inside of Target stores nationwide.

In addition, CNBC reports, “Kroger has been transforming its business to compete against the evolving retail landscape. It acquired a stake in British online supermarket Ocado in May, agreed to buy meal kit company Home Chef and launched grocery delivery service Kroger Ship. It also plans to open an online storefront on Alibaba's platform, Tmall Global, for international brands. The focus will include dietary supplements and private label products under the brand Simple Truth.”
KC's View:
Smart move and in its own way, inevitable … and perhaps indicative of an even closer relationship between these two giant retailers down the line.

This is exactly what retailers like Kroger have to do - find new and innovative ways to make its stores and site the first and easiest choice for consumers. It is about being relevant and resonant to shoppers. And it is about making new connections that will serve the customer in smart ways.

Kroger, in particular, seems to be making a flurry of moves in recent days … almost as if it knows the clock is ticking, and that speed and experimentation have to be of the essence. I would agree with that perception.