Kroger Acquires Digital Coupon Provider

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Kroger Acquires Digital Coupon Provider


CINCINATTI -- The Kroger Co. purchased the assets of YOU Technology Brand Services Inc., a Silicon Valley-based provider of digital coupons and promotions. YOU Tech, which currently serves about two dozen retailer clients operating 65 store banners, will operate as an independent company within the Kroger family.

"YOU Tech's nimble and innovative digital coupon platform has enabled Kroger to deliver hundreds of millions of digital coupons to Kroger customers," said Jeff Talbot, Kroger's vice president of customer loyalty. He described the deal as “a good strategic fit for both Kroger and YOU Tech.”

Talbot explained that the transaction – the financial terms of which were not disclosed – “is consistent with our digital customer growth plan and provides Kroger a significant opportunity to expand our presence in Silicon Valley, enhancing our exposure to new technologies.” YOU Tech will benefit from Kroger's strong balance sheet as it continues to expand its digital platform to many other retailers and consumer packaged goods (CPG) partners, he added.

Kroger's accelerated growth strategy includes targeted capital investments to increase its store base and square footage in both new and existing markets, and to strengthen its connection with customers through the growing digital and mobile channels.

Customer use of digital coupons has accelerated exponentially over the past several years. Kroger began offering digital coupons in late 2009 and reached 500 million digital coupon downloads about three years later. In just the last 12 months, customers have downloaded more than 400 million more digital coupons, demonstrating their growing popularity and frequency of use.

According to YOU Tech CEO Cheryl Black, this deal will help the South San Francisco-based firm commence with plans to “build and grow the premier retailer and customer-centric digital coupon platform in the industry, while continuing to deliver for our broad base of retail customers. We look forward to partnering with Kroger and other retailers and CPG companies to continue driving growth."

The Kroger Co. operates more than 780 convenience stores, along with roughly 2,600 supermarkets and multidepartment stores in 34 states and the District of Columbia under two dozen banner names. Its c-store banners include Kwik Shop, Turkey Hill Minit Markets, Loaf N' Jug and Tom Thumb Food Stores.