Kroger Expands Its Reach To 36 States Without Opening New Stores
Kroger is delivering groceries directly to doorsteps in Oklahoma — one of a number of new markets the grocery giant is serving despite not opening a single new store.
Oklahoma marks the 36th state Kroger has entered as it expands its national home delivery capability and was made possible by an industrial hub the company opened in Oklahoma City in November, CoStar reports. The last-mile cross-dock facility gets products from an advanced robotics warehouse in Dallas, about 200 miles away.
The Oklahoma City hub, which Kroger is calling a “spoke facility,” is powered by the Ocado Group, a grocery technology company. Kroger also has opened spoke facilities in Miami, Tampa and Jacksonville, Florida; Austin and San Antonio, Texas; and in Alabama, Indiana, Kentucky and Ohio.
At the Dallas hub, more than 1,000 bots move around 3D grids and pack orders using an algorithm. Facilities like the Ocado-automated Oklahoma spoke and the 350K SF South Dallas fulfillment center have changed how the Cincinnati-based grocer is able to "step into a market," Kroger Director of Economic Development Rita Williams said.
"We have fulfillment centers in various locations — right now we have over 10 fulfillment centers as we build out our ecosystem," Williams told an audience at the ICSC@Red River conference in Dallas, CoStar reported. "The fulfillment centers will essentially put together an order in less than four minutes with the help of [artificial intelligence] and the baskets delivered on refrigerated delivery trucks."
Customers up to 90 miles from the spoke facilities can order groceries through Kroger’s website or app, and refrigerated vans with the capacity to store 20 orders deliver them.
Kroger Delivery "underpins the permanent shift in grocery consumer behavior and elevates our position as one of America's leading e-commerce companies,” Kroger Chairman and CEO Rodney McMullen said in a news release.
Kroger has highlighted its ability to bring fresh food to areas known as food deserts as it unrolled its delivery expansion, including in Chicago’s suburb of Maywood. It also counts fulfillment centers in Monroe, Ohio; Groveland, Florida; Forest Park, Georgia; and Pleasant Prairie, Wisconsin. More are slated for California, Maryland, Arizona, Michigan, Ohio and North Carolina.
Kroger's latest expansion comes as it moves toward a merger with rival grocer Albertsons.
Williams told CoStar that she expects “business as usual” ahead of the $24.6B deal announced in October. The deal moved closer to reality last week when the Washington state Supreme Court declined to review a case brought by the state attorney general to stop a dividend payment to Albertsons’ shareholders, The New York Times reported. The attorney general had argued the payment could result in the closure of Albertsons and Safeway locations if the transaction fails, according to The Seattle Times.
The companies maintain the merger will be good for customers, employees and communities.