The technology assets of Dunnhumby, the “customer science” company co-owned by Kroger and Tesco, were acquired yesterday by the huge U.S. supermarket chain. Under the new arrangement, Kroger retains Dunnhumby’s technology platform and the talent that runs it, some 500 employees who will now work for a wholly owned Kroger unit called 84.51?. The name refers to the longitude of Kroger’s Cincinnati headquarters.
The customer insights company will continue to operate in the U.S. under the Dunnhumby name, though it will do so without access to Kroger’s voluminous customer data. Kroger operates 2,640 supermarkets, 786 convenience stores, and 1,240 gas stations in the U.S., encompassing banners such as Dillons, Harris Teeter, and Ralphs, in addition to Kroger.
The new arrangement gives Kroger marketers the flexibility to work with new technology partners and tools, whereas it had been restricted to working expressly with Dunnhumby. Kroger retains a perpetual license to use Dunnhumby analytical tools, and Dunnhumby will provide service and maintenance for those tools for five years. DunnhumbyUSA chief Stuart Aitken will assume the CEO role at 84.51°.
The new unit, Kroger said in a press release, will be an “innovation engine” focused on developing customer science, analytics, and insights for Kroger, consumer packaged goods companies, and other partners. 84.51? will be housed in the Dunnhumby Centre (above) at Fifth and Race Streets in downtown Cincinnati.
“Kroger and Dunnhumby revolutionized retailing in the U.S. by focusing on the customer, and we intend to do it again with 84.51°,” said Kroger Chairman and CEO Rodney McMullen. “The ability to combine what we already know with other partners is exciting and will speed up innovation. We will continue to utilize data science for the benefit of the customer and to deliver a personalized experience, both in-store and online.”
Tesco, long the dominant supermarket chain in the U.S., has recently seen its business model challenged by discounters Aldi and Lidl. In April, Tesco, posted a record loss of $9.7 billion, due largely to a write-down for unsuccessful store expansion.