Kroger bidding for Boxed.com? (Rumor)

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storewanderer
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Kroger bidding for Boxed.com? (Rumor)

Post by storewanderer » January 13th, 2018, 11:28 am

http://www.supermarketnews.com/online-r ... iler-boxed

Kroger hasn't even started to sell its own products that I think would make sense (like Simple Truth foods) online yet at their owned Vitacost.com. Where is the synergy? My last Vitacost order did include a promotional sheet from Fred Meyer Jewelers, maybe that is all the synergy they can figure out how to implement so far.

And no selling online of Fred Meyer general merchandise despite that competitors like Target, Wal Mart, and even Kmart have been selling online for decades.

Kroger keeps sailing off into some real murky water.

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Kroger in talks to buy Boxed for $500 Million

Post by steps » January 13th, 2018, 8:49 pm

Never heard of this company before. It looks like the sell bulk items online. I wonder what Kroger what do with this company? Might be a good fit to sell Fred Meyer merchandise.

https://finance.yahoo.com/news/boxed-ta ... 09381.html

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Re: Kroger bidding for Boxed.com? (Rumor)

Post by pseudo3d » January 14th, 2018, 4:54 pm

The most interesting thing to me is if Kroger wants to be more like Costco/Sam's Club and sell more bulk package items. Where things especially get interesting is if Kroger wants to introduce the larger club sizes into its stores. Woodman's Food Market in Wisconsin used to sell a number of items from The Clorox Company (including Hidden Valley ranch dressing) until due to cost-cutting 2014, Clorox stopped selling it to non-club stores. Woodman's sued under the Robinson-Patman Act, and the 7th Circuit Appeals court unanimously sided with Clorox, meaning Woodman's would never be able to get the large sizes back in its stores. If Kroger manages to get the club-sized pack in their stores, I could see things get hairy again legally...

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Re: Kroger bidding for Boxed.com? (Rumor)

Post by storewanderer » January 14th, 2018, 7:34 pm

Kroger has already done that.

Out west, Lucky for years had a "Max Pak" aisle (or half aisle) with club packs. As a result out west, Ralphs and Smiths (pre-Kroger) developed their own club pack aisle. Fred Meyer also had club packs, but I am not sure if they had a separate aisle for them. For instance, as Ralphs remodeled the NorCal Albertsons they bought, in 1999-2001, they added in their Big Buys aisle (typically the aisle would have Big Buys on one side and a large bulk scoop/bin candy area on the other side). The pre-Kroger Fred Meyer even had a private label for bulk pack items called First Choice that was seen at Ralphs, Smiths, and Fred Meyer, which ultimately did make it to Kroger but was discontinued by the late 00's.

Albertsons retained the Max Pak aisles in most former Lucky Stores during the 00's (in some cases the aisle disappeared during remodels). When Save Mart got NorCal, one of the first things they did was start to market the Max Pak aisle again, complete with the old 90's Lucky Max Pak logo. Save Mart also added the Max Pak aisle to original Albertsons Stores in NorCal/Nevada that previously did not have the aisle (only former Lucky Stores had it under Albertsons). Save Mart has since removed that aisle from a number of stores they have reset in the past few years, but a few locations do still have it. Supervalu seemed to phase out the Max Pak aisles and programs in their former Lucky Stores.

Safeway also had bulk pack aisles in some of their stores in the mid 90's, at least in NorCal. The Safeway built in Reno in 1996 had bulk pack items on its first aisle, but those were reset away by the early 00's. The Pak N Save locations also had a large bulk pack area.

So it is not a new concept, at least out west, for the conventional grocers to have bulk pack items.

Given Kroger's limited efforts to sell their own items online, zero effort to sell Fred Meyer General Merchandise online, and little visible synergy with Vitacost, I have no reason to believe somehow buying Boxed.com would make Kroger suddenly start to handle more bulk pack items in their stores. Frankly, I am not sure it is the best use of their space. Maybe in the marketplace stores that have more space, but in the normal 55,000 square foot boxes, given all of the new SKUs the past decade for natural/organic, I don't think bulk items are the most margin-producing or customer satisfying use of space.

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Re: Kroger bidding for Boxed.com? (Rumor)

Post by pseudo3d » January 30th, 2018, 9:47 pm

So it turns out that Kroger really was bidding for Boxed.com, because they rejected an offer from Kroger.

http://www.supermarketnews.com/news/box ... oger-offer

Unless analysts and Kroger went with a really lowball offer, $300-$400 million dollars seems like a lot to drop on a peripheral business without much ready integration into your business model or stated future plans.

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Re: Kroger bidding for Boxed.com? (Rumor)

Post by arizonaguy » February 1st, 2018, 10:18 pm

pseudo3d wrote:
January 30th, 2018, 9:47 pm
So it turns out that Kroger really was bidding for Boxed.com, because they rejected an offer from Kroger.

http://www.supermarketnews.com/news/box ... oger-offer

Unless analysts and Kroger went with a really lowball offer, $300-$400 million dollars seems like a lot to drop on a peripheral business without much ready integration into your business model or stated future plans.
This match-up never seemed to make much sense.'

I'm surprised to see that Costco isn't a bidder for Boxed.com.

Costco's e-commerce platform is stuck in 2007/2008. They really need something to keep up with the times.

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