Kroger plans three more Ocado e-commerce ‘spokes’

The Kroger Co. is once again leveraging e-commerce to dive into new geographies without adding stores.

At its 2022 Business Update investor event on Friday in Orlando, Fla., Kroger unveiled plans to build three more Ocado-automated online order fulfillment facilities to help process online orders. The new spoke locations – in Austin and San Antonio, Texas, and Birmingham, Ala. – are expected to go live later this year and support much larger Ocado customer processing centers (CFCs), including one that lives in the Atlanta area and another planned in Dallas.

“Kroger’s digital investments are focused on increasing capacity, improving customer experience and developing new innovative propositions through our strategic partnerships, including our Kroger Delivery distribution network powered by Ocado technologies” , said Yael Cosset, Chief Information Officer and Chief Digital Officer. A declaration. “Kroger’s ever-growing ecosystem continues to evolve and allows us to reach customers who are not near a store with delivery services, and we are committed to doubling our digital sales and our profitability transmission rate by the end of 2023. And our continued network expansion will help us achieve this goal. »


Each of the Austin, San Antonio and Birmingham departments will create up to 161 jobs, according to Kroger.

The 70,000 square foot radius in northeast Austin and the 67,000 square foot radius in northeast San Antonio will operate with the 350,000 square foot Ocado CFC in Dallas, announced in September 2019. The two spokes, which Kroger says are awaiting finalization of lease negotiations, will serve as last-mile transshipment locations and expand the reach of Kroger’s delivery service.

Meanwhile, the 50,000 square foot radius planned for 30 West Oxmoor Rd. in Birmingham will also serve as a transshipment site and extend the delivery service supporting the 375,000 square foot CFC powered by Ocado at Forest Park, in Georgia, open in early February. This facility and the Austin and San Antonio departments will each create up to 161 jobs.

The three new satellite sites will mark the eight announced so far by Cincinnati-based Kroger. Three spokes are now live — in Indianapolis and Tampa and Jacksonville, Fla. — and two more are planned for Louisville, Ky., and Oklahoma City. This latest ray site, a 50,000 square foot facility announced last month and slated to launch later this year, will work with the Dallas CFC and bring Kroger to its 36th state, Oklahoma.

Also in February, Kroger announced plans to open a 50,000 square foot department in Louisville, Ky., later this year, following the December launch of a 48,000 square foot department in Indianapolis. These two spokes support a 375,000 square foot CFC in Monroe, Ohio, which opened in April and was Kroger’s first Ocado facility to go live.

“I’m incredibly excited about the future of Kroger, and thriving brick-and-mortar stores and digital solutions are a part of that,” Kroger Chairman and CEO Rodney McMullen said at the Business Update event. “We continue to be excited about the momentum we are seeing with Kroger Delivery and our partnership with Ocado, helping Kroger strategically leverage our unique assets to expand into existing regions – including Atlanta, Cincinnati and Dallas – as well enter new geographies like Austin, Birmingham, Cleveland, Oklahoma City, Orlando, San Antonio, South Florida and the Northeast through a flexible network of high-tech facilities of various sizes operated by friendly and competent associates.

KrogerKroger Ocado Indianapolis Spoke Truck Bay.jpg

Overall, Kroger said it plans to launch 17 new Ocado installations, including spokes and CFCs, over the next 24 months.

In total, Kroger has announced 17 CFCs, three of which are now fully operational. In addition to the Forest Park and Monroe facilities, a 375,000 square foot CFC in Groveland, Fla. was commissioned in June in a state where Kroger has no physical stores. Earlier this week, Kroger announced plans to build a 270,000 square foot CFC in the “Cleveland area” that will serve areas of northeastern Ohio and Pennsylvania, the latter representing the 37th state in the United States. retailer.

Other Ocado CFCs reported by Kroger range from 135,000 to 375,000 square feet and include locations in Frederick, Maryland; Phoenix; Pleasant Prairie, Wisconsin; and Romulus, Michigan, as well as unspecified locations in North Carolina, the Pacific Northwest, the West, and the Northeast, the latter representing another location where Kroger lacks stores. The retailer also announced plans for two CFCs in Southern California and two more in Florida.

Kroger said Friday it plans to open 17 new Ocado-led facilities, including CFC hubs and spokes, over the next 24 months.

“We are excited to continue to expand Kroger’s fulfillment network, with dedicated facilities of varying sizes providing additional scale, experience reliability and the benefits of automation and broad customer reach, in both current operating regions as well as new parts of the United States. commented Gabriel Arreaga, senior vice president and chief supply chain officer at Kroger. “This network enables Kroger to create thousands of jobs in technology, operations, logistics and customer service and improve access to fresh food in cities hungry for variety and variety. value offered by Kroger that were once only available in our stores.”

Kroger unveiled its partnership with UK-based Ocado Group in May 2018, when the companies said they were planning 20 CFCs in the US over the next three years. Ocado’s CFCs and supporting facilities use vertical integration, machine learning and robotics to fulfill online grocery orders and are expected to expand Kroger’s reach to a larger geographic footprint, including in areas where it does not operate physical stores.

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