The popular Chinese company Alibaba and US-based Kroger are in talks about working together on a number of ventures. This comes on the heels of the announcement last year that Amazon would be purchasing Whole Foods outright. That deal has already gone through and happened, so other grocery chains like Kroger now have to figure out their counter-strike.
Kroger’s stock had taken a big hit when the news came out about Amazon taking over Whole Foods. People were somewhat shocked by the news, and the assumption was that stores like Kroger would not fare well with competition the likes of Amazon beating on their door. That being said, Kroger has clearly taken some progressive steps to defend itself against all foes at this point by at least hinting at the idea that they might partner with Alibaba.
It is yet unclear what the two companies might do if they were to pair up according to CNBC. It is difficult in some ways to imagine what the two could have in common. Then again, it would have been difficult to picture Amazon and Whole Foods partnering up, but they did that.
Consolidation in the grocery space might be good for consumers. They can perhaps find better deals in an interestingly competitive market. From the perspective of Kroger, you have to remember that they were already feeling the heat from the fact that companies like Wal-Mart and Target have developed their own grocery sections as well. Many consumers simply go there to get all of their shopping done at one time. The last thing in the world that Kroger needed right now was more competition from Amazon.
These changes have forced the grocery to change up its stores in a variety of ways. Walk into a Kroger’s store these days and you will find more high-end groceries on sale. You will see things like sushi available to grab and go. The stores are also kept cleaner and in less disarray than they were in the past. Kroger’s has felt the need to do all of this just to keep up with the competition.
In those ways, customers really are benefiting from all of this competition. They can see the stores are trying harder to win their business, and that is always a good thing. It will be interesting to see what kind of deals, if any, Alibaba and Kroger’s are able to partner up on.