Kroger on Friday announced what it is calling a "strategic partnership" with Colorado-based, 17-store Lucky's Market, which operates stores focusing on "natural, organic and locally grown products" in 13 states. The deal, which calls for an as-yet undisclosed investment by Kroger, is designed to "significantly accelerate Lucky's Market's growth in new and existing markets."
The move is just the latest in a series of efforts by Kroger to expand its footprint and experiment in venues outside its traditional business model. The company has in recent years acquired Harris Teeter and Roundy's/Mariano's, and tried to acquire The Fresh Market, while at the same time opening a Main & Vine store in Washington State that focuses on fresh, local foods.
The move is just the latest in a series of efforts by Kroger to expand its footprint and experiment in venues outside its traditional business model. The company has in recent years acquired Harris Teeter and Roundy's/Mariano's, and tried to acquire The Fresh Market, while at the same time opening a Main & Vine store in Washington State that focuses on fresh, local foods.
- KC's View:
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Several things seem likely to me here.
One is that it seems probable that Kroger will own Lucky's outright sooner rather than later.
Another is that following its traditional pattern, Kroger will manage to teach the folks at Lucky's a lot about how it does business, while effectively learning what it can from the Lucky's approach.
And it also seems likely that Kroger will allow Lucky's to achieve a more focused growth pattern - 17 stores in 13 states doesn't sound very efficient to me.
The Tampa Bay Business Journal positions the move as a direct threat to Publix, writing that "with Kroger behind it, Lucky's is likely to become a much more significant competitor in the grocery world — and yet another new concept to chip away at Publix's market share. In recent years, Publix has held its own against specialty grocers by offering more organic and natural items and increasing its prepared foods departments."
