Kroger’s New Deal With dunnhumby Might Mean Tesco Is Selling

Kroger is rearranging its agreement with dunnhumby…and that might mean that Tesco is one step closer to selling the data analytics company.

U.S. grocery chain Kroger Co. announced yesterday (April 27) that it is acquiring the data analytics assets of dunnhumbyUSA and more than 500 of its employees to form a new consumer insights company called 84.51°, which will be owned entirely by Kroger. As stated in the press release, Stuart Aitken, who previously led dunnhumbyUSA, will become the chief executive officer of 84.51°.

According to Bloomberg, this buyout indicates that Tesco — the largest supermarket chain in the U.K. and parent company of dunnhumby Ltd. — is ever more likely to sell off the customer-data subsidiary, a move that Tesco first indicated was a possibility back in January. Bloomberg reports that analysts estimate a potential sale of dunnhumby would bring Tesco about $3 billion, a sum that would likely go toward paying down the grocery chain’s debt of $33 billion.

“[The purchase of dunnhumbyUSA by Kroger] removes [for Tesco] a stumbling block to selling dunnhumby, and also adds a potential additional revenue stream,” John Kershaw, an analyst at Exane BNP Paribas, told Bloomberg. “The opening up of the North American market looks appealing and should help bolster the price bidders may be willing to pay.”

While Kroger will still be able to utilize dunnhumby’s analytical tools as part of the new arrangement, dunnhumby, by contrast, will not retain access to Kroger’s customer data — effectively marking the end of a joint venture that had been in place since 2003.