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Kroger CEO sidesteps question on potential Walgreens deal

The Kroger Co.'s top executive sidestepped a question on whether the grocery retailer might consider a potential deal with Walgreens Boots Alliance Inc. as he spoke at a retail industry conference Jan. 13.

Kroger and Walgreens are already working together in one regard, with a pilot project that allows customers to buy groceries and pick up online orders at certain Walgreens stores near Kroger's Cincinnati headquarters. Speaking at the National Retail Federation's 2019 Big Show in New York, Kroger Chairman and CEO Rodney McMullen said the grocery retailer has been encouraged by early results from the pilot.

When CNBC reporter Sara Eisen asked the executive about whether Kroger would entertain a merger or acquisition involving Walgreens, McMullen would only say that Kroger is focused on its current pilot and making grocery shopping more convenient for consumers.

"We said 'Let's go and get something started,'" McMullen said, referring to discussions with Walgreens Executive Vice Chairman and CEO Stefano Pessina and Co-COO Alexander Gourlay. "The customer will lead us to what's appropriate."

In the face of competition from Amazon.com Inc., both Kroger and Walgreens have turned to partnerships with a range of companies in recent quarters. In May 2017, Kroger said it would work with U.K.-based online grocer Ocado Group PLC to build warehouses specifically for filling grocery orders for delivery to customers' homes. Walgreens, meanwhile, has launched joint retail operations with a host of partners, ranging from FedEx Corp. to Sprint Corp.