Grocery giant Kroger (KR) and China e-commerce heavyweight Alibaba (BABA) have recently chatted about potentially working together, according to multiple reports. The talks are happening as stores continue to eye Amazon‘s (AMZN) moves in the food space following its multibillion-dollar acquisition of Whole Foods Markets last year and its debut this week of cashier-less convenience-store concept Amazon Go.
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The discussions were in the early stage, said Reuters, and will not necessarily result in a deal. According to the New York Post, which first reported the news, senior execs on both sides met in China last month. Alibaba has reportedly been expanding the store count of its Hema supermarkets in the country.
The Kroger-Alibaba news follows last week’s report that Kroger was mulling a bid to acquire online home goods seller Overstock (OSTK), which would bolster its e-commerce operations and expand its presence in the home-furnishings market.
Kroger, which operates 2,790 stores under the Food4less, Fred Meyer, Harris Teeter and Ralphs names among others, is also said to be in advanced talks to acquire Boxed.com, a wholesale e-tailer that has earned the moniker “Costco for millennials.”
Despite Amazon’s smaller presence on the grocery front — there are fewer than 500 Whole Foods stores and only one Amazon Go — Wall Street is keenly aware of the online retailer’s disruptive potential. After the takeover, Amazon was quick to cut prices at the upscale grocery store, offer Whole Foods products on Amazon.com and install Echo displays in Whole Foods stores.
Kroger shares were up 2.3% at 30.15 in the stock market today, finally retaking the 30 price level for the first time since Amazon first made its bombshell acquisition announcement last June. Alibaba rallied 1.1%, and Amazon added 1.1%.
Kroger isn’t the only chain scrambling to build a greater digital defense in this e-commerce age. Target (TGT) announced Thursday that, in tandem with newly acquired online grocery marketplace Shipt, it would roll out same-day delivery in Florida.
And as Investor’s Business Daily reported last week, Wal-Mart (WMT) has trademarked “Wam! by Walmart,” which relates to “retail and online grocery store services featuring home delivery service.”
A Wal-Mart spokesperson said the company did not have further details to share on that trademark at the moment, but is “always thinking about new concepts and ways that will help us best serve customers now and in the future.”
Target shares were down 1.1%, and Wal-Mart edged up 0.6%.