The Kroger Co. and Ocado have named central Florida and the Mid-Atlantic as the next two areas where they will build automated warehouses for online grocery fulfillment.
In announcing plans for the two new facilities on Tuesday, Kroger didn’t specify locations or give timetables for construction.
Kroger and Ocado so far have announced three customer fulfillment centers (CFCs), or “sheds,” of the 20 that they aim to build over the next three years as part of an agreement unveiled in May. Kroger said in November that the first CFC will be in the suburb of Monroe, Ohio, just north of Cincinnati.
"Kroger is excited to partner with Ocado — one of the most innovative, advanced companies in the world — to redefine the grocery shopping experience for customers along the East Coast," Kroger Chairman and CEO Rodney McMullen said in a statement. "We are incredibly excited to introduce customer fulfillment centers in this region to deliver on our Restock Kroger vision to serve America through food inspiration and uplift."
Previously, Kroger said it’s investing $55 million to build the CFC in Monroe, which will be sized at 335,000 square feet. Plans call for the CFC model — an Ocado-powered warehouse, featuring digital and robotic technology — to be replicated nationwide to fulfill “anything, anytime and anywhere” online orders from customers.
"Kroger is developing the retail model of the future through our exciting partnership with Ocado, a U.K.-based company with global ties," according to Alex Tosolini, senior vice president of new business development at Kroger. "We will co-innovate with Ocado to develop the best possible experiences for our customers, leveraging advanced robotics technology and creative solutions."
In the third quarter, its most recently completed reporting period, Kroger saw a 60% increase in digital sales. Industry analysts have said the partnership with Ocado will enable Kroger to turn up the heat on grocery competitors by extending its omnichannel reach.
"This announcement marks another important step toward combining Kroger's long-standing dedication to innovative and world-class grocery services with Ocado's unique, industry-leading technology," said Luke Jensen, CEO of Ocado Solutions. "As the U.S. retail landscape continues to change, these CFCs will play a crucial role in helping Kroger offer its customers a superior online shopping experience in these two major markets."