(Bloomberg) -- Kroger Co. is adding Walt Disney Co.’s streaming services as a new perk for members of its grocery delivery program, as retailers seek to grow their membership offerings.
Premium-tier users of Kroger Boost will get the ad-supported versions of Disney+, Hulu or ESPN+ at no additional cost, according to the companies. Kroger’s basic-tier members will get a one-time, six-month subscription to one of the services. The new benefit will be available starting Wednesday to annual Boost members, who make up the vast majority of the program.
The companies declined to disclose terms of the deal. Bloomberg News previously reported that Kroger and Disney were discussing a streaming partnership.
Free streaming is the first major benefit for Kroger Boost since its launch in 2022. The companies started discussions earlier this year after many Kroger customers pointed to streaming as a perk they’d like to have, Tom Duncan, vice president of marketing at Kroger, said in an interview. The grocer learned that Boost users have a strong affinity for Disney services and quickly zeroed in on the entertainment giant as a potential partner.
For Kroger and other retailers, membership programs have emerged as an important avenue to cultivate loyalty and increase sales. Those who pay for delivery subscriptions typically spend more, both in store and online. Kroger doesn’t disclose the number of Boost members.
There’s been a flurry of new membership programs in recent years such as Walmart Inc.’s, Instacart Inc.’s and Target Corp.’s. To grow their user base, companies are offering special deal events for members while adding benefits like gas savings, pet care and dining deals. Streaming has become a popular perk.
Still, these plans are dwarfed by Amazon.com Inc., which started its Prime program in 2005 and has hundreds of millions of users around the world. Operators are also competing to appeal to price-conscious households that have been selective with their spending.
Kroger Boost has two tiers: $59-per-year membership offers free next-day delivery, while $99-per-year membership provides free delivery in as little as two hours. If purchased separately, the ad-supported versions of Disney+ and Hulu will cost $9.99 per month each, after price increases this month. ESPN+ will cost $11.99 a month, or $119.99 a year.
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