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Kroger Buys Certain Dunnhumby Assets To Create New ‘84.51°’ Business

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Last updated on June 14th, 2024 at 10:26 am

DunnhumbyUSA joint venture partners dunnhumby Ltd. and The Kroger Co. today announced what they call a “new chapter in their successful alliance that will provide greater flexibility for both parties to use data to create substantial opportunities for innovation and growth.” Under the new arrangements dunnhumby Ltd. and Kroger will replace their existing exclusive joint venture with a new long-term license and service agreement and the acquisition of certain assets from dunnhumbyUSA by Kroger. A new business called 84.51° will operate with those assets as its foundation.

Dunnhumby Ltd. says it will continue to operate in the U.S. as dunnhumby, expanding its client base and accelerating the growth of its business through the greater flexibility of the new arrangements with Kroger. Dunnhumby will now have the ability to use its proven insight products and data expertise to capture the substantial, previously unavailable potential of the North American market through working with new retailers, consumer brands and media partners. Dunnhumby says it will continue to pioneer the field of customer science through innovations in retail consulting services, analytics software, data science and digital media and will continue to develop its existing strong platform of client relationships in the U.S. Current retail clients of the joint venture will be seamlessly transitioned to dunnhumby. Dunnhumby will continue to operate from offices in the U.S. in Cincinnati, New York, Boston, Chicago and Sacramento. Dunnhumby says its work with retailers and brands in its other 70 countries earning the loyalty of nearly one billion customers continues as normal.

Under the new arrangements, Kroger says it will retain dunnhumby Ltd.’s technology and the talent to continue developing Kroger’s leading customer insights and loyalty programs for the benefit of its customers. More than 500 of dunnhumbyUSA’s employees will become associates of 84.51°, a wholly-owned subsidiary of The Kroger Co. 84.51° also will have the benefit of a perpetual license to use dunnhumby Ltd.’s analytical tools to find customer insights in Kroger’s data. Dunnhumby Ltd. will provide service and maintenance on those tools for five years, but will no longer have access to Kroger’s data. Current consumer packaged goods companies that serve Kroger customers and work with dunnhumbyUSA will be seamlessly transitioned to 84.51°. Stuart Aitken, who previously led dunnhumbyUSA, will become CEO of 84.51°.

In addition, 84.51° will have the flexibility to accelerate future innovation by working with new partners and new tools, always toward the goal of engaging customers where, when and how it matters most to them, according to a news release. Where previously Kroger was restricted to working with dunnhumby only, the new non-exclusive arrangement now makes available to 84.51° the use of innovative tools from other companies to analyze its data. 84.51° will be an innovation engine, focused on rapidly developing customer science, analytics and insights to bring new solutions to market to support Kroger, consumer packaged goods companies and other partners, the release says. 84.51°’s headquarters will be in the building at Fifth and Race streets in downtown Cincinnati.

“We are excited to bring our insights and capabilities to more of the American market and to continue our relationship with Kroger over the next five years,” said Simon Hay, CEO of dunnhumby Ltd. “The wider U.S. market is a fantastic opportunity for dunnhumby to help more retailers and brands undertake a similar journey using data-informed insights to delight their customers and earn their loyalty.”

Added Rodney McMullen, Kroger’s chairman and CEO, “Kroger and dunnhumby revolutionized retailing in the U.S. by focusing on the customer, and we intend to do it again with 84.51°. We are launching 84.51° with a powerful foundation, including a decade of experience and a team of incredibly talented associates from both dunnhumbyUSA and Kroger. The ability to combine what we already know with other partners is exciting and will speed up innovation. We expect these innovations to grow our business and deliver a world-class customer experience. We will continue to utilize data science for the benefit of the customer and to deliver a personalized experience, both in store and online. Doing so will continue to differentiate Kroger and create value for our shareholders.”

Financial terms of the new arrangements were not disclosed. The new businesses commence operations today. There are no anticipated headcount reductions as a result of the new arrangements.

Dunnhumby is wholly owned by U.K.-based Tesco Plc. Tesco announced a review of the strategic options for dunnhumby in early January.

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The Shelby Report delivers complete grocery news and supermarket insights nationwide through the distribution of five monthly regional print and digital editions. Serving the retail food trade since 1967, The Shelby Report is “Region Wise. Nationwide.”

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