Kroger (KR) stock rose 3.65% on Tuesday. Whole Foods (WFM) stock was down 0.73%, but it’s up over 0.2% in pre-market trade. The two companies are in the spotlight this week for many reasons.
Kroger is rumored to be eyeing a potential acquisition of Whole Foods. The rumors began last week, and at this point, they seem to be just rumors. Kroger has a strong organic brand that is steadily growing, but the addition of Whole Foods would add an additional 446 stores to Kroger’s 2,781 stores.
Initial rumors speculated that the company may bid $40 a share for Whole Foods.
The news sent Whole Foods stock up over 5%, but the frenzy seems to have slowed down. Whole Foods is struggling to maintain its market share of the organic foods market, and this may be the biggest hurdle in a potential acquisition from Kroger.
Amazon (AMZN) has also put the company under pressure, as AmazonFresh offers grocery delivery to consumers’ doors. The move by Amazon is also putting pressure on the Kroger brand.
A Kroger and Whole Foods deal remains unlikely at this point, but it has helped push up both companies’ shares in the short-term.
Kroger is also working towards an online push to help combat Amazon. The company is under further pressure as Amazon plans to open drive-in stores that allows consumers to pick up their groceries. Convenience stores are also on Amazon’s agenda, according to reports.
Kroger’s stock has performed well in recent weeks, hitting a 52-week high last week. The company will remain in the spotlight until either Whole Foods or Kroger deny any talks of a potential acquisition in the near future.
Food prices have fallen for nine months straight, and this will put grocery stores in the spotlight as Q3 2016 earnings start to be released.
