Kroger Continues To Take the Fight to Walmart and Target But Will It Be Enough?

In the last few days, Kroger has announced a expanded tie-up with Bed, Bath and Beyond on the Kroger website by adding to Home & Baby categories to its e-marketplace.

There are at least a few stories happening here.

One, Food is getting more competitive. Walmart continues to expand its capabilities in grocery, and its omnichannel capabilities are growing. Did I mention Target? They are expanding their food offerings in a big way in order to incent more return trips. And it's working. Costco is also a monster which isn't going away anytime soon - I would predict their share is the most durable -- numbers I have seen at 5% of the US grocery market.

Estimates I have seen put Walmart at 21% of US grocery and Kroger at ~10%. But my suspicion is that Kroger's numbers are not growing. Would love to have the data.

Kroger can't sit still to survive.

Second, Bed Bath and Beyond needs more distribution. Mostly for its private label brands -- it's not like Kroger couldn't source the major brands directly.

Third - there is likely a high degree of overlap between Bed Bath and Beyond customers and Kroger, as this is the extension of an in-store pilot that was announced last year.

Marketplaces tend to work well in broad categories like home. Baby is another matter because trust is so important, but many families are obviously baby shopping in the grocery aisles.

The convenience factor is big.

Will this be a difference maker compared to Walmart?

I do not think so. Walmart can still do all of this, on its own, and at higher margin. Target could still pluck the best ideas here for itself.

Will be interesting to watch this one.