Swirling Kroger, Target merger rumors prompt Friday morning stoc - Cincinnati News, Weather, Sports from FOX19 NOW-WXIX

Swirling Kroger, Target merger rumors prompt Friday morning stock spike

There was a sizable pre-market surge for Kroger and Target on Friday as rumors swirled about a possible merger. (FOX19 NOW file) There was a sizable pre-market surge for Kroger and Target on Friday as rumors swirled about a possible merger. (FOX19 NOW file)

Those of you who wake up every morning and Google "Kroger stock" and "Target stock" just to get a feel for grocery world goings-on each day may have noticed a pre-market surge for both companies Friday.

Now, of course, it's quite possible nobody does that oddly specific routine each day, but here's what you would have seen:

So, why the spike? Well, it may have had something to do with a Friday morning report from Fast Company that the two were mulling a merger "as grocery wars rage."

CNBC, however, has reported that there are no talks about a merger, but meetings have taken place regarding an Internet-based delivery service:

The two have had meetings over a Shipt partnership, CNBC's source said.

Target acquired same-day delivery company Shipt for $550 million in cash in December, in a move to bolster its supply chain and compete with rivals on speed.

That CNBC report, as well as a report from Forbes, touched on the recent Amazon/Whole Foods merger as well as a perceived pressure on e-commerce. Forbes reported that regardless of a merger, the Amazon threat is clear:

According to data from FMI and Nielsen, within seven years 70% of consumers will shop for groceries online (and, in the process, spend $100 billion per year).

Meanwhile, a separate study from digital intelligence firm L2 found that 58% of the grocers analyzed -- a list that includes Target, Kroger, H.E.B, Publix and more -- have partnered with Instacart to compete on the e-commerce front.

Kroger is part of that 58% and, just last week, announced that it is expanding its own partnership with Instacart. The company currently delivers from about 872 stores and offers curbside pickup at more than 1,000 stores; throughout this year, Kroger said, it wants to add another 500 stores to this program.

Kroger has already launched a Clicklist pickup service.

Our media partners at the Cincinnati Enquirer report that Kroger does have home delivery in some markets. But while Shipt could be a key asset to drawing Kroger's interest, the Enquirer reports, it has been a "notoriously picky" company with mergers and acquisitions:

Kroger looks for alliances with well-run company's that give it new abilities: Kroger's 2015 takeover of Wisconsin's Roundy's gave it an appealing urban supermarket format: Mariano's; Kroger's 2004 takeover of North Carolina's Harris Teeter gave it 'Click and Collect,' which Kroger expanded into ClickList across the country...

Wells Fargo analyst Edward Kelly told investors the merger would give both retailers enhanced scale, but it would be distracting to operations to consummate the deal. He also said the combination wouldn't solve each companies underlying weaknesses.

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