The Kroger deal escalates a fight for leadership in the burgeoning business after Walmart Inc. in March announced plans to expand its grocery home-delivery service to more than 100 metro areas this year, with deliveries handled by services such as Uber Technologies Inc. Dutch grocer Ahold Delhaize NV, which gets the bulk of its 63 billion euros ($74 billion) of sales from U.S. chains such as Food Lion and Hannaford, aims to get 5 billion euros of sales online by 2020.

Online competition is heating up as pricing pressure squeezes profit margins, forcing grocers to get together. In the U.K., Tesco Plc has acquired wholesaler Booker, while J Sainsbury Plc has agreed to buy rival Asda from Walmart, which is taking over Indian e-commerce provider Flipkart. French retailers are forming purchasing alliances.

Kroger Deals

With estimated sales of $123 billion in the current fiscal year, Kroger is the second-biggest grocer in the U.S. behind Walmart. After deals such as a $13 billion acquisition of Fred Meyer Inc. in 1999 and a $2.5 billion purchase of Harris Teeter Supermarkets Inc., the Cincinnati-based company operates in about 35 U.S. states. It has 2,800 supermarkets and stores under brands including Ralphs.

Kroger shares were up 0.2 percent in early trading before U.S. markets opened.

Kroger and Walmart each offer click-and-collect services in more than 1,000 locations, according to Bloomberg Intelligence analyst Jennifer Bartashus. Kroger has been charging a $4.95 service fee.

Sourced through Scoop.it from: www.bloomberg.com