Kroger, Dunnhumby restructure relationship

Kroger and Dunnhumby on Monday announced a new arrangement whereby Kroger would acquire certain assets of DunnhumbyUSA and come to a long-term service license to use its technologies under a new business to be known as 84.51°.

The agreement will lift restrictions on Dunnhumby pursuing business with additional U.S. retailers, and will no longer restrict Kroger from employing other firms to analyze its data. Stuart Aitken, who previously led DunnhumbyUSA, will become CEO of 84.51°. Simon Hay will continue to serve as CEO of Dunnhumby, which is owned by the U.K. retailer Tesco. Financial terms of the new agreement were not disclosed.

Kroger, Cincinnati, and London-based Dunnhumby announced a joint venture in 2003 seen as a key advantage in Kroger’s sales growth, with Kroger eventually acquiring a part interest in its U.S. arm. More than 500 of DunnhumbyUSA’s employees will become associates of 84.51. 84.51° will also have the benefit of a perpetual license to use Dunnhumby’s analytical tools to find customer insights in Kroger’s data. Dunnhumby will provide service and maintenance on those tools for a period of five years, but will no longer have access to Kroger’s data. Current consumer packaged goods companies that serve Kroger customers and work with DunnhumbyUSA will be seamlessly transitioned to 84.51°, Kroger said.

“Kroger and dunnhumby revolutionized retailing in the U.S. by focusing on the customer, and we intend to do it again with 84.51°,” Rodney McMullen, Kroger’s chairman and CEO, said in a statement. “We are launching 84.51° with a powerful foundation, including a decade of experience and a team of incredibly talented associates from both dunnhumbyUSA and Kroger. The ability to combine what we already know with other partners is exciting and will speed up innovation.

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“We expect these innovations to grow our business and deliver a world-class customer experience,” he added. “We will continue to utilize data science for the benefit of the customer and to deliver a personalized experience, both in store and online. Doing so will continue to differentiate Kroger and create value for our shareholders.”

Dunnhumby said it will now have the ability to use its insight products and data expertise to capture the previously unavailable potential of the North American market through working with new retailers, consumer brands and media partners, the company said. The firm will continue to pioneer the field of customer science through innovations in retail consulting services, analytics software, data science and digital media and will continue to develop its existing strong platform of client relationships in the U.S.