Kroger and Walgreens form group purchasing organization
Building on a unique collaboration that first brought together The Kroger Co.'s (NYSE: KR) food and grocery experience with Walgreens' expertise in health and beauty, the companies have formed a new group purchasing organization aimed at delivering purchasing efficiencies, lower costs and combined resources to help drive further innovation. The new joint venture will be called Retail Procurement Alliance.
"This collaboration is an extension of the strategic collaboration announced last year to create value for customers and shareholders of both companies," said Gary Millerchip, Kroger's chief financial officer. "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 two great organizations to reinvent critical components of our sourcing practices."
"Through this unique joint venture, Walgreens and Kroger have the opportunity to use our collective resources to create efficiencies across our supply chains," said Alex Gourlay, co-chief operating officer, Walgreens Boots Alliance. "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."
Kroger and Walgreens initially announced an exploratory pilot in October 2018 to develop a one-stop shopping experience, which launched in December 2018 as the Kroger Express concept in 13 Walgreens stores in Northern Kentucky. In August 2019, Walgreens and Kroger announced an expansion of the pilot at 35 Walgreens locations in Knoxville, TN, and introduced a curated assortment of Walgreens health and beauty products at 17 Kroger stores in the same area.