Dive Brief:

• Kroger is merging with Murray's Cheese, the premium cheese retailer with a flagship store in New York and satellite locations in 350 of the retailer's grocery stores nationwide, according to a company statement.
• Supermarket News reports that Kroger purchased the building at Greenwich and Bleecker streets in New York that houses the flagship Murray’s Cheese store for $20.6 million. The retailer also purchased the company's equity for an undisclosed amount, according to the company statement.
• Since 2008, the Cincinnati-based supermarket company has housed Murray’s Cheese locations inside its stores. According to the company announcement, Murray's former owner and president Rob Kaufelt will become a strategic adviser. The New York-based leader of the Murray's team, Nick Tranchina, will stay and report to Kroger's vice president of culinary development and deli/bakery merchandising.

Dive Insight:

When Kroger began piloting Murray’s Cheese shops inside its stores nearly a decade ago, the pairing seemed an odd one.

But the supermarket chain, which knew that its customers increasingly could tell their gouda from their gruyere, also knew that it couldn’t do specialty cheese as well as it would like. Murray’s, meanwhile, was keen on growing outside its New York market without having to invest in risky standalone cheese shops.

The results were immediate: After replacing three of its specialty cheese sections with Murray’s Cheese, sales shot up between 50% and 100%.

Since then, the unlikely duo has become a can’t-miss partnership. Last year, Murray’s opened 100 new locations inside Kroger stores, bringing the total up to 350 stores. The specialty cheese shops are Murray’s through and through, stocked with hundreds of different cheeses as well as olives, crackers, charcuterie, pickled plums and jams. To make sure each location is up to snuff, Kroger sends managers to New York for a boot camp at the Murray’s flagship store.

Kroger’s purchase of that flagship store reflects the retailer’s affection for its Big Apple cheese partner. In the company statement, Kroger chairman and CEO Rodney McMullen said the grocer is "excited to ensure this iconic cheese shop will remain a part of the Kroger family for many years to come." It’s a solid business investment, and perhaps Kroger sees an opportunity to make the store more of a tourist destination. There will also surely be savings and perhaps some knowledge gained by having more Murray’s staff on the payroll.

Does it mean the nation’s largest supermarket is invading New York? Not likely. The chain isn’t really built for urban growth, and New York is a tough, crowded market. More likely, Kroger wanted to further indulge in one of its favorite pairings.