Walgreens, Kroger Expand Partnership with Group Purchasing

More than a year after announcing a pilot joint venture, Kroger and Walgreens have formed a group purchasing organization (GPO).

The new GPO, Retail Procurement Alliance, is aimed at “delivering purchasing efficiencies, lower costs, and combined resources to help drive further innovation,” Walgreens and Kroger said in a joint statement.¹

"This collaboration is an extension of the strategic collaboration announced last year to create value for customers and shareholders of both companies," Gary Millerchip, chief financial officer at Kroger said.¹ "Kroger and Walgreens share a commitment to finding value and efficiency improvements by increasing innovation and competition through sourcing. This concept brings together the best of 2 great organizations to reinvent critical components of our sourcing practices."

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"This collaboration will also enhance our ability to drive innovation for customers, including both of our private label brands, to further meet their evolving needs for value and convenience,” Alex Gourlay, co-chief operating officer of Walgreens Boots Alliance, added.¹

In October 2018, Kroger and Walgreens announced an exploratory pilot to develop a 1-stop shopping experience.²

The pilot launched in December 2018 as the Kroger Express concept in 13 Walgreens stores. Kroger Express, a curated assortment of 2300 products, selected using customer data and insights by a Kroger subsidiary, was rolled out in the test stores in Northern Kentucky, near Kroger's Cincinnati, OH headquarters.³

The Kroger Express selection includes Home Chef meal kits, national products, and Kroger’s Our Brands products, including Simple Truth natural and organic items.

This August, Walgreens and Kroger announced an expansion of the pilot at 35 Walgreens locations in Knoxville, TN. They introduced a curated assortment of Walgreens health and beauty products at 17 Kroger stores in the area.⁴

References:

1. Kroger and Walgreens Form Group Purchasing Organization as Companies Expand Collaboration with New Joint Venture [news release]. Kroger’s website. http://ir.kroger.com/File/Index?KeyFile=401553771. Accessed December 11, 2019.
2. Kroger & Walgreens Join Together in Exploratory Pilot [news release]. Walgreens’ website. https://news.walgreens.com/press-releases/general-news/kroger-walgreens-join-together-in-exploratory-pilot.htm. Accessed December 11, 2019.
3. Kroger and Walgreens Expand Exploratory Pilot. Walgreens’ website. https://news.walgreens.com/press-releases/general-news/kroger-and-walgreens-expand-exploratory-pilot.htm. Accessed December 11, 2019.
4. Kroger and Walgreens to Expand Exploratory Pilot to Knoxville, Tennessee [news release]. Walgreens’ website. https://news.walgreens.com/press-releases/general-news/kroger-and-walgreens-to-expand-exploratory-pilot-to-knoxville-tennessee.htm. Accessed December 11, 2019.