Kroger Acquires YOU Technology, Accelerates Digital Growth

By PG Edit Staff

The Kroger Co. has bought the assets of YOU Technology Brand Services, Inc., the 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 VP of customer loyalty. Describing the deal as “a good strategic fit for both Kroger and YOU Tech,” Talbot noted that the transaction – 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 CPG partners."

Cheryl Black, YOU Tech's CEO, said the 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."

Digital Growth Opportunity

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 3 years later. Customers have downloaded more than 400 million more digital coupons in just the last 12 months, demonstrating their growing popularity and frequency of use.

"We are very excited to welcome YOU Tech's leadership team and current associates to the Kroger family," said Talbot. "Cheryl and her team have built an innovative company that is positioned to grow."

The Kroger Co. operates 2,641 supermarkets and multi-department stores in 34 states and the District of Columbia under two dozen local banners, as well as 786 convenience stores, 327 jewelry stores, 1,218 supermarket fuel centers and 38 food processing plants.