There is “no actuality” to a report that Target and Kroger are in merger talks, a source minuscule to the matter told CNBC on Friday.
Shares in both companies flooded in premarket trading Friday after Fast Company reported the two were consult oning a merger deal. It cited several people with knowledge of the business.
The report said the two companies first started discussing a partnership ultimately summer but decided “a merger is the best path forward.”
Target allots were up fractionally in Friday after jumping during the premarket when the report in investigate was published. Kroger’s stock rose 8 percent initially on the report, but later skinned much their gains.
The two have had meetings over a Shipt partnership, CNBC’s origin said. Target acquired same-day delivery company Shipt for $550 million in spondulicks in December, in a move to bolster its supply chain and compete with struggle withs on speed.
Amazon acquired Whole Foods Market for $13.7 billion in gelt last year, sparking fears the e-commerce giant will break in the entire grocery sector.
Target has notably struggled in the fresh grub category relative to its peers. Its supply chain for those items has dawdled, people familiar with the situation have told CNBC, position the door for potential partners such as Kroger to bring expertise in the bailiwick.
Just last year, Target tapped a former Kroger exec, Jeff Burt, to premier its grocery department. Since then, the company has made incremental alterations to its food offering, redesigning that area of the store as part of a bigger remodeling scheme. But analysts and investors continue to call out the business as lackluster.
“We believe Aim has much further to go before the grocery business is fully fixed,” GlobalData Retail Preside over Director Neil Saunders said.
Instead, Target has focused on its private-label types for apparel and home goods of late, beefing up those categories in the vanguard moving into food, which can be more capital intensive and the recurrence on investment isn’t as compelling.
Kroger and Target did not respond to CNBC requests for view.