Kroger grows mobile with Vitacost acquisition

Kroger (NYSE:KR) is building out its online and mobile expertise through the acquisition of health products retailer Vitacost.

Kroger announced the acquisition of Vitacost.com, an online retailer of healthy living products. Under the agreement, Kroger will purchase all outstanding shares of Vitacost.com for about $280 million.

The deal is a strategic one for Kroger, adding digital expertise. Vitacost currently has 2.3 million active customers and the e-retailer's platform includes technology and ship-to-home fulfillment centers serving shoppers in the United States and internationally.

Vitacost reported a 57 percent increase in mobile sales volume for the first quarter of 2014 and mobile makes up 13 percent of the company's total sales. It's also been busy upgrading its mobile site and app for improved mobile checkout and customer service in addition to efforts to market more specifically to mobile shoppers.

"Vitacost.com's talented team had built an exceptional online retail destination in the growing nutrition and wellness market, with an enviable technology and fulfillment infrastructure," said Rodney McMullen, CEO, Kroger. "This merger is in line with our growth strategy to enter new markets and new channels, and – along with Harris Teeter's online order and pick up service – accelerates our efforts to provide customers with even more ways to shop."

Vitacost's e-commerce platform will enable Kroger to serve shoppers through ship-to-home orders in all 50 states, including 16 states that are currently not served by Kroger supermarkets. Vitacost has built out a site rich in content including recipes, videos and customer reviews, saved lists and subscriptions — all features considered critical to a strong mobile shopping program in grocery.

Building on Vitacost.com's technology and fulfillment platform and linking it to Kroger's existing digital capabilities will accelerate Kroger's omnichannel strategy.

*A version of this story originally appeared in FierceMobileRetail's sister publication, FierceRetail.

For more:
-See this Kroger press release
-See this Vitacost earnings call transcript

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