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Kroger and Walgreens Form Group Purchasing Organization as Companies Expand Collaboration with New Joint Venture

Kroger and Walgreens Form Group Purchasing Organization as Companies Expand Collaboration with New Joint Venture



CINCINNATI & DEERFIELD, IL - Kroger and Walgreens Boots Alliance first joined hands back in 2018, launching an exploratory pilot that has since seen a recent expansion. Now, the companies have formed a new group purchasing organization (GPO), a joint venture that will be known as Retail Procurement Alliance.

Gary Millerchip, CEO Personal Finance and Corporate Strategy Integration Lead, Kroger“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, Kroger's Chief Financial Officer. “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.”

Kroger and Walgreens have formed a new group purchasing organization (GPO), a joint venture that will be known as Retail Procurement Alliance

CNBC reported that the chain retailers are aiming to increase sales while lowering costs by looking for overlaps in the products they are receiving, consolidating on orders and aiding both businesses. Millerchip continued stating to CNBC that both companies will also see if Kroger can start manufacturing items in-house for Walgreens, and vice versa.

Alex Gourlay, Co-Chief Operating Officer, Walgreens Boots Alliance“Through this unique joint venture, Walgreens and Kroger have the opportunity to use our collective resources to create efficiencies across our supply chains,” said Alex Gourlay, Co-Chief Operating Officer for Walgreens Boots Alliance. “This collaboration will also enhance our ability to drive innovation for customers, including both of our private-label brands, to further meet their evolving needs for value and convenience.”

Millerchip further commented that he hopes other retailers are interested in taking part in this cost-saving venture.

With their new venture, Kroger and Walgreens are aiming to increase sales while lowering costs by looking for overlaps in the products they are receiving

“If another organization thinks they have significant buying in these areas, they could partner with Kroger and Walgreens to save and reduce waste,” Millerchip said.

Would this new strategy be enticing enough for other retailers to hop on? Keep reading AndNowUKnow to learn more retail news.

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