Kroger Considers Going Into Hardware Sales

In their ongoing attempts to remain competitive in an increasingly crowded grocery landscape, Kroger is reportedly in talks with Ace Hardware about pursuing a potential partnership. That partnership would see Ace locations pop up within Krogers — mini-store style.

Kroger currently is the parent firm behind 2,800 grocery stores in the U.S. — and has been facing a tough half of 2017 as it saw its stock take a major hit in June with the announcement that Amazon.com was buying Whole Foods Market.  Kroger has worked hard to battle back from that crash — and reported a 109 percent uptick in online sales during Q3. Share price has largely recovered from the mid-year crash, and ClickList — the brand’s buy online, pickup in store program, now online in almost half of Kroger’s locations — has buttressed confidence that they are prepared to take on Amazon Whole Foods.

Stores-within-stores is not a new move for Ace — it has been offering the mini-store model as a franchise for local store owners since 2012. Paint chain Benjamin Moore has such a partnership with Ace and operates 400 express stores, according to the latest data available.

If the Ace set-up with Kroger goes through, the grocer would be Ace’s biggest partnership, according to the source with knowledge of the deal.

Analysts and consultants have been urging consolidation in the highly fragmented grocery market, particularly since the Amazon Whole Foods deal became official.

Supply chain expert and Kroger consultant Brittain Ladd noted that Ace is a good first step for Kroger, which should cast an even wider net as it attempts to make its store more competitive — and seek out partnerships with firms like Ulta Beauty, Best Buy and toy stores.

“Kroger should view general merchandise (all non-food items) as an opportunity to increase revenue,” he wrote, adding that the retailer “must evaluate which option will delight the most customers.”