The Kroger Company, the country’s largest pure-play supermarket operator, announced on October 12 that it would be entering the Northeast for the first time and will expand its e-commerce network by adding five new automated customer fulfillment centers (CFC) in conjunction with current e-commerce warehouse partner Ocado. The Hatfield, England-based company, whose U.S. headquarters are located in Tysons Corner, VA, first announced its exclusive partnership with Kroger in 2018.
The Cincinnati-based retailer, which operates more than 2,700 brick and mortar stores in 34 states, did not disclose the specific location of its new Northeast warehouse but said, when completed, it will meet the need for same-day and next-day delivery.
Two of the other new Kroger/Ocado depots are slated for South Florida with smaller-sized fulfillment centers. According to Ocado CEO Luke Jensen, “Kroger is also leveraging the full breadth of Ocado’s fulfillment capabilities to meet the growing range of customer wants and demands. Alongside the current rollout of our automated facilities and software to optimize fulfillment in stores for curbside pickup, today’s announcement of a further CFC in Florida and the introduction of our first ‘Zoom’ micro fulfillment site in the U.S., serving the immediacy market, is a testament to the breadth and flexibility of the offering we are helping to bring to Kroger shoppers. These fulfillment centers will also benefit from significant upstream efficiencies, with the existing CFC in Groveland able to act as a major supply hub into the new Florida sites.”
The retailer said that the two new South Florida CFCs will enable Kroger Delivery to serve customers as fast as 30 minutes with a selection of 10,000 fresh food items and essentials, and to deliver same-day and next-day orders with 35,000 items. In June, Kroger opened its first fulfillment center in Florida, where it operates no physical stores in Groveland (30 miles west of Orlando) with two “spoke” depots in Jacksonville and Tampa.
Additionally, Kroger will expand its existing operations and boost capacity in Southern California with the addition of two medium-sized and smaller CFCs. Currently Kroger operates about 320 stores in the Golden State under the Ralph’s and Food 4 Less banners.
Before announcing the five new CFCs, in 2019 Kroger unveiled a plan in which 10 Ocado-partnered depots would be built, with sizes ranging from 135,000 to 375,000 square feet. They include locations in Frederick, MD; Forest Park, GA; Dallas, TX; Phoenix AZ; Pleasant Prairie, WI; and Romulus, MI, as well as two unspecified locations in the Pacific Northwest and West (now presumed to be the two CFCs in Southern California). Also included in that original list were the Groveland site and the first CFC to open – 375,000 square foot depot in Monroe, OH which debuted in April 2020.
While Kroger was deliberately coy about announcing certain specifics of its e-commerce expansion plan, the big merchant said it will share more insights about its plans for the Northeast, California, and Florida, including customer coverage areas, job creation, facility sizes and timing, in the coming months.
“Kroger Delivery is a thriving part of our dynamic ecosystem and is transforming grocery e-commerce and meeting a range of customer needs through the introduction of first-of-its-kind technology in the U.S. developed by Ocado,” said Rodney McMullen, Kroger’s chairman and CEO. “Kroger’s growing seamless ecosystem continues to scale, and we’re committed to doubling both our digital sales and profitability rate by the end of 2023 and Kroger Delivery will help us reach this target. We feel great about the momentum we’re experiencing with Kroger Delivery and our partnership with Ocado and are strategically leveraging our assets to expand our operations in existing regions as well as enter new geographies on the East Coast that leverage facilities across a growing range of sizes.”
