All photos courtesy of The Kroger Co.
Kroger opened its first Ocado customer fulfillment center (CFC), a 375,000-square-foot automated warehouse, in April 2021 in Monroe, Ohio.
The high-tech Kroger CFCs use Ocado Group’s vertical integration, machine learning and robotics to fill e-grocery delivery orders.
In the Monroe CFC, over 1,000 bots containing totes with products dart across huge 3D grids — known as “The Hive” — managed by air-traffic control systems.
When order delivery times near, the bots retrieve the products from The Hive and bring them to pick stations, where items are sorted for delivery.
Kroger’s 48,000-square-foot, Ocado-automated “spoke” site in Indianapolis supports the Monroe, Ohio, CFC “hub” to process online orders with fresh food.
Packed groceries are loaded into temperature-controlled delivery vans, which can store up to 20 orders.
Opened in June 2021, Kroger’s 375,000-square-foot CFC in Groveland, Fla., marked its first in a state where the company lacks physical stores.
Kroger Chairman and CEO Rodney McMullen (left) with Ocado CEO Tim Steiner at the Groveland CFC.
While the Ocado CFCs use automation and AI to service e-grocery orders, on-site associates help to process, package and load orders and support delivery operations.
The 80,000-square-foot spoke in Maywood, Ill., will support the CFC hub in Pleasant Prairie, Wis., and extend its service radius to 200 miles, enabling Kroger Delivery to reach customers in metro Chicago.
As of the fiscal 2021 year-end, 2,257 Kroger Co. stores provided online grocery pickup, and over 2,500 stores offered delivery.
Under its seamless ecosystem, Kroger envisions customers being able to easily move between channels — brick-and-mortar stores and digital, and among in-store shopping, pickup and delivery — and get the same high-quality experience.
The Kroger Ship services provides direct-to-home delivery for kroger.com orders.
Kroger CEO Rodney McMullen said the Ocado-driven network will expand the reach of Our Brands, its $28 billion own-brands portfolio.
The Kroger Co. operates 2,723 stores under over 20 banners, and 82% of customers live within five miles of a store, with most living within two miles.
In its fiscal 2022 first half, Kroger certified another 1,200-plus stores under its End-to-End Fresh Produce program.
According to Kroger chief merchant Stuart Aitken, 70% of customers base their choice of shopping venue on fresh products.
Last year, Kroger added the “fresh cart” icon to its logo and “Fresh for Everyone” tagline to spotlight its strength in fresh foods.
Overall, Kroger serves more than 60 million households annually through its brick-and-mortar and digital properties and brands.
Depending on its size, an Ocado CFC can equal the sales of about 20 stores, and at full capacity, annual sales per module (the Monroe CFC has seven modules) are projected at $80 million to $100 million, Kroger reported.