NEW YORK ( TheStreet) -- Kroger's ( KR) latest acquisition had less to do with physical square footage and more to do with consumers who shop online. As customers continue to choose online shopping and digital coupons to save money on grocery items, Kroger found it necessary to acquire You Technology. The acquisition will bridge Kroger's physical and digital operations and also provide upside as it helps its competitors.
You Technology is a leader in digital coupons and brand management. The company works with such clients as Dr Pepper Snapple Group (DPS), Unilever (UL), Johnson & Johnson (JNJ) and Tropicana (PEP). More important, You Technology provides digital coupon platforms for grocery retailers Kroger, Giant Eagle, Safeway (SWY) and SuperValu (SVU).
Kroger will keep You Technology as an independent company. With the acquisition, Kroger will now be able to benefit directly from competitors like Safeway and SuperValu. As digital coupons increase user engagement and store spending, Kroger will see a small percentage of sales come into its financials. You Technology is also in growth mode and could expand into other retailers with cash backing from Kroger. You Technology CEO Cheryl Black said her company intends "to build and grow the premier retailer and customer-centric digital coupon platform in the industry."
Kroger's ownership of You Technology could also help its relationships with consumer brands. With Tropicana and Dr Pepper among key customers of You Technology, Kroger should be able to leverage this as a retailer and technology provider. Kroger now has a much larger impact on the sales seen at large companies like Dr Pepper, Pepsi and Unilever.