Walgreens Boots Alliance and Kroger will expand a new format to yet another market that combines the drugstore chain’s “health and beauty products” with the grocery giant’s popular brands.
Saying they are building for now on an “exploratory format,” the companies said 35 Walgreens stores in Knoxville, Tennessee will include Kroger Express and Kroger pickup as well as Kroger’s popular “Our Brands” including “Simple Truth” organic foods. The rollout this fall builds on a pilot launched last year at 13 Walgreens stores in northern Kentucky, which is not far from Kroger’s Cincinnati headquarters.
The Walgreens pilot comes as the drugstore chain looks to compete with Amazon’s online food delivery through its Whole Food subsidiary and the coming services offered by CVS Health, which is opening hundreds of new “HealthHub” locations to expand healthcare services following its acquisition of the health insurer Aetna. And Walmart, which has pharmacies in many of its stores, has myriad grocery items and last week reported strong sales and an upbeat profit forecast thanks in part to surging e-commerce sales.
The Knoxville expansion also includes a “curated selection of Walgreens’ owned-brand health and beauty products in 17 Kroger stores” ranging from beauty and personal care to over-the-counter medications.
Walgreens and Kroger executives hinted in their press releases that Monday’s announcement wouldn’t be the last. “Expanding our pilot to Knoxville demonstrates the ongoing success and future potential of bringing together the best of Kroger’s food authority with Walgreens’ global expertise in health and beauty,” Kroger’s vice president of new business development, Jeff Talbot said.
Walgreens executives say the pilot stores provide customers the “convenience of Kroger Pickup” so they can place a digital order via the grocer’s web site or app for “curbside pickup at a participating location.”
“Working with Kroger, we’re continuing to re-invent our customer offer to meet shoppers’ evolving needs, which includes offering private-label grocery and health products at a great value, through an integrated omnichannel experience,” Walgreens president of operations, Richard Ashworth said.