Walgreens and Kroger to form a new group purchasing venture
Category: #retail  By Pankaj Singh  Date: 2019-12-13
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Walgreens and Kroger to form a new group purchasing venture

Walgreens, a renowned U.S. based pharmacy-led health, beauty and well-being company, and Kroger, an American retail company, reportedly announced that they would be expanding their existing relationship to create a new group purchasing organization.

The new venture called Retail Procurement Alliance is built on both the companies’ retail partnership. The two firms are already integrating Walgreens health and beauty products and the popular brands of the grocery giant in various U.S. markets as part of the pilot program.

The new group purchasing venture was reportedly announced at a time when Walgreens is contemplating on going private through leveraged buyout.

Meanwhile, both the firms formed the new group venture to deliver purchasing efficiencies, combine resources and lower costs to help drive innovation. The financial terms of the agreement have not yet been disclosed by both the firms.

Alex Gourlay, co-chief operating officer, Walgreens Boots Alliance, reportedly stated that the new joint venture gives them the opportunity to use their collective resources and create efficiencies across their supply chains. Gourlay further added, that the tie-up would enhance their capability to drive innovation for customers, to further meet their changing needs for value and convenience.

According to the industry observers, the two companies might collaborate further given the scale of Kroger, having hundreds of U.S. stores and supermarkets under various brands and Walgreens, having 9,200 drugstores in U.S.

Earlier in 2019, the companies stated that 35 Walgreens stores in Knoxville would include Kroger pickup and Kroger Express along with other popular brands including organic foods by Simple Truth. The expansion of Knoxville also included a selection of health and beauty products brand owned by Walgreens in 17 Kroger stores.

Additionally, some analysts have questioned the partnership of Walgreens with Kroger; whether it would be able to generate revenues and income to compete with its rival drugstore CVS Health and Walmart, which is set to open its first healthcare super centers.

Stefano Pessina, CEO, Walgreens, reportedly stated at the Forbes Healthcare Summit 2019, that the agreement with Kroger resulted in improved sales. Furthermore, in some markets the drugstores might have to include grocery items, depending on the demands of the regional market.
 

Source credit: https://www.forbes.com/sites/brucejapsen/2019/12/11/walgreens-and-kroger-get-closer-with-group-purchasing-venture/#4515fb3e7115



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Pankaj Singh

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Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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