No truth to Kroger-Target merger talks: source

Kroger Co. and Target Corp. have not discussed a potential merger of the two companies, according to a source with knowledge of the situation, who asked not to be identified.

Fast Company magazine reported on Friday that Cincinnati-based Kroger and Minneapolis-based Target had been in discussion about a potential merger since last summer.

Both Kroger and Target declined to comment.

Shares of both companies rose Friday on the reports of the merger talks, before several media sources reported that the reports were not true.

The source told Supermarket News that Kroger and Target have, however, discussed working together around Shipt, the third-party delivery service Target acquired last year that provides home delivery of groceries through partnerships with several grocery chains around the country.

Speculation about mergers involving both Kroger and Target crop up repeatedly. Last fall, European sources suggested that Kroger could be eyeing a merger with Ahold, a merger some analysts still believe might make sense.

Earlier this year Kroger was reported to have made an offer for the grocery e-commerce site Boxed.com, but that offer was reportedly rejected by Boxed.

Kroger’s acquisitions in recent years have included both e-commerce companies, such as Vitacost, and retailers in markets where the company was seeking to expand, as was the case with Harris Teeter in the Mid-Atlantic and Roundy’s in the Midwest.

Earlier this month Kroger agreed to acquire 18 Farm Fresh stores in the Hampton Roads/Virginia Beach area from Minneapolis-based Supervalu, and last year the company bolstered its Indiana presence through the purchase of 11 Marsh Supermarket locations.

“In-market acquisitions have worked very well for Kroger in the past,” said Chuck Cerankosky, an analyst with Northcoast Research, Cleveland, following Kroger’s agreement to buy the Farm Fresh stores.