One retailer under pressure from Amazon plus a grocery store under pressure from Amazon does not equal a solution.
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Shares of Target Corp. and Kroger Co. jumped on Friday morning amid speculation they were in talks to merge. It would be a mammoth deal, creating a company with a combined market value in excess of $50 billion and annual revenue of almost $200 billion should it occur. CNBC later said there’s no truth to the reports, but interestingly, Target and Kroger held onto some of their gains for much of the morning, suggesting there may be something to a combination that’s attractive to investors on both sides.
Each company has something the other needs. Kroger has been lacking in formulating a plan for adapting to the e-commerce grocery push heralded by Amazon.com Inc.’s takeover of Whole Foods Market Inc. As for Target, it’s been making strides in digital but needs a more differentiated and significant grocery operation. That Target sees groceries as a clear battleground was made clear by its decision to…