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Kroger and rivals in talks to buy online wholesaler Boxed for up to $500mn

Credit: Boxed

US grocery chain Kroger is considering buying online wholesaler Boxed, according to multiple news reports.

The potential deal comes as more shoppers place food orders online and as competition with e-commerce giant Amazon Inc. heats up. 

The online bulk-order wholesaler Boxed has received acquisition interest from Kroger and several other major retailers, according to people close to the matter. 

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The New York-based startup, which sells bulk staples like toilet paper and pet food to shopper’s doorsteps, is reportedly valued to be worth between $325mn and $500mn, according to sources. 

Amazon’s $13.7bn acquisition of Whole Foods last year heightened a sense of urgency among rivals looking ways to ramp up their e-commerce and digital abilities to compete with the world’s largest online retailer. 

Indeed, last month, Target announced that it had agreed to buy same-day delivery platform Shipt for US$550mn. 

Historically, Cincinnati-based Kroger has been picky in making acquisitions but in recent years the retailer has made a series of smaller deals that have helped to enhance its digital savvy brand. 

Kroger’s $2.5bn takeover of North Carolina-based Harris Teeter in 2014 gave it a solid grocer in the Southeast as well as the technology that became its main digital strategy: ClickList, which allows customers to order online and pick up groceries in drive-thru lanes.