Walgreens and Kroger are building on their existing partnership to form the Retail Procurement Alliance, a group purchasing organization. The joint venture is aimed at delivering purchasing efficiencies, reduced costs and combined resources to help the companies drive innovation.
The retailers initially launched a one-stop shop partner pilot in October 2018 that allowed customers to pick up their Kroger grocery orders at 13 Walgreens locations in northern Kentucky. The stores also began stocking Kroger’s Our Brand private label items, including Simple Truth natural and organic products, to complement Walgreens’ health, wellness, pharmacy and beauty offerings.
That pilot has since expanded to 35 additional Walgreens stores in the Knoxville, Tenn. area. The specific assortment varies by store, but some locations now carry products as varied as fresh meat, produce, dairy and frozen foods. Walgreens also has launched its private label brand health and beauty products in 17 Kroger stores in the Knoxville area.
“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, CFO at Kroger in a statement. “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.”