Dive Brief:
- Kroger is acquiring a majority stake in its data analytics partner DunnhumbyUSA and will enter a long-term service licensing agreement to use DunnhumbyUSA's technologies under a new business name, 84.51°, which will be a wholly-owned Kroger subsidiary. Neither company disclosed financial terms of the agreement.
- According to Supermarket News, "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."
- Kroger and Dunnhumby's relationship thus far has helped Kroger maintain an edge over its competitors with a superior way to collect and analyze customer data to make more informed decisions, such as what products to stock and what coupons to offer.
Dive Insight:
DunnhumbyUSA is under the umbrella of Dunnhumby Ltd., which is owned by UK grocery retailer Tesco. Tesco announced in January that it was considering selling off Dunnhumby in CEO Dave Lewis' effort to "streamline the organization, selling off non-core assets and cutting costs in order to focus on the main supermarket business," Computing reported.
Tesco has been in trouble after overstating its profit guidance by about $408 million last year, for which it is under investigation. In October, Tesco also reported that its before-tax profits had dropped nearly 92% for the first half of the year, after which the retailer's chairman stepped down. Earlier this year, Tesco announced another series of changes as well, including shuttering 43 of its locations. Whether or not a sell-off of Dunnhumby would help Tesco unearth itself from the hole it currently finds itself in is up for debate.