Grocery giant Kroger is thinking about starting a new business venture related to the healthcare field, according to a report in Bloomberg.
Kroger CEO Rodney McMullen told the news outlet the firm is “doing a lot of exploratory work” in the healthcare area. He said healthcare is an opportunity that could greatly benefit the grocer’s customers, and potentially lower their medical costs.
The move would also supply the company with new revenue to help it reach a goal of $400 million in profit by next year. Kroger has also expanded into advertising and personal finance.
“Healthcare is an area where we see a lot of opportunity,” McMullen said. And while he revealed, “We’re talking to several potential partners at the moment,” he declined to identify who those potential partners were.
Healthcare is a popular field for growth, and companies like Walmart and Amazon have all made inroads into the industry recently, with the latter teaming up with Berkshire Hathaway and JPMorgan Chase on a wellness endeavor called Haven.
Kroger has already delved into the industry in a collaboration with Walgreens that allows customers to pick up orders at the drugstore. Walgreens also carries some Kroger health-related and organic items.
The grocer’s pharmacy business also posted growth last year, with 9 percent of sales coming from pharmacy-related operations.
The company is actively trying to boost revenue after investors saw it wasn’t making the type of progress they hoped. Kroger shares tumbled on Thursday (March 7) amid the news.
Sarah Halzack, of Bloomberg Opinion, said a lackluster Q4 earnings report was to blame.
“While comparable sales rose 1.9 percent from a year earlier, a respectable result that was in line with analysts’ expectations, its revenue and adjusted earnings per share fell short of estimates,” she wrote. “The one-two punch prompted Kroger’s shares to plunge in early trading … investors are right to be concerned about whether the efforts are going to come together and make for a more competitive Kroger.”