Retail

As Amazon and Walmart Battle, Kroger Gets Stronger

Douglas A. McIntyre

Published: August 18, 2018 8:25 am

Last Updated: January 11, 2020 7:10 pm

Most of the headlines about the grocery wars are about the battle between Amazon.com Inc. (NASDAQ: AMZN) and Walmart Inc. (NYSE: WMT). Most recently, Walmart’s management told investors its grocery business had grown rapidly in the latest quarter than it has in years. Amazon continues to target the grocery industry with discounts and special services for many of its 100 million Prime members, particularly for shoppers at Whole Foods, which it bought just over a year ago. Left out of many discussions is the largest grocery retailer in the nation. Kroger Co. (NYSE: KR) shares are 37% higher in the past year to about $31.

Walmart’s management wrote as it reported one of its best quarter in a decade:

Fresh food category sales were strong and led to the best grocery comp in 9 years. Customers continue to gravitate toward our selection of fresh produce, meat, and bakery items that offer great quality at low prices.

Among Walmart’s advantages is that it has 4,761 stores in the United States, most of which sell groceries. Amazon is at a disadvantage in this category. Whole Foods has only 487 locations, spread between North America and the United Kingdom. However, Amazon has tried to make up for this by pushing Prime members to use Whole Foods. Prime members can get 10% off on some Whole Foods merchandise. Prime members also can get two-day free delivery of some items.

Walmart also has started new programs to draw customers. The latest is that people who shop at Walmart online can have their groceries delivered to them at Walmart locations.

Kroger has services that compete with Amazon and Walmart. The most recent is called Shipt. Yael Cosset, Kroger’s chief digital officer, described it as follows:

Kroger Ship is our next step in creating a seamless experience that allows our customers to shop when and how they want. Our new service is just one more way we are redefining the customer experience as part of Restock Kroger, bringing more convenience and options to shoppers across America. Kroger Ship complements and joins our 2,800 grocery stores, 1,250 curbside pickup locations, and delivery service from 1,200 locations.

In a tiny experiment, Kroger has set a partnership with robot car Nuro to test autonomous car delivery via small cars.

Kroger’s advantages continue to be its brand and 2,782 supermarkets. Unlike Amazon and Walmart, it only sells groceries. For consumers, one-stop shopping for things they need maybe enough. The aisles at Walmart are full of things other than groceries, and not everyone wants to become a Prime member to shop for food.