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CINCINNATI — Kroger Co. is expanding the reach of its grocery delivery service into Oklahoma, a state where it does not have physical stores.
Earlier this month Kroger said it was adding an automated “spoke” order fulfillment center in Oklahoma City, powered by the Ocado Group. When the 50,000-square-foot facility becomes operational later this year, it will collaborate with a hub in Dallas, serving as a last-mile cross-dock facility.
“We’re excited to extend the Kroger fulfillment network to Oklahoma City, a new geography for our operation and an integral part of our strategy to achieve the doubling of our digital sales and profitability rate by the end of 2023,” said senior vice president and chief supply chain officer Gabriel Arreaga. “This grocery delivery service is an innovative addition to the expanding digital shopping experience available to our customers. The spoke facility will provide unmatched, impeccable customer service and improve direct access to fresh food in areas eager for the variety and value offered by Kroger.”
The expansion in Oklahoma City represents an extension of a partnership between Kroger and Ocado. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics and automation in a bold new way, bringing first-of-its-kind technology to America.
Kroger chairman and chief executive officer Rodney McMullen said Kroger Delivery “underpins the permanent shift in grocery consumer behavior and elevates our position as one of America’s leading e-commerce companies.”
Through the delivery network, the company now serves customers in Florida, for example, without traditional brick-and-mortar stores.
Kroger last year opened “spoke” facilities in Tampa and Jacksonville, Fla., which work with a “hub” in Groveland, Fla. — a 375,000-square-foot customer fulfillment center (CFC) that became operational in June.
Kroger opened its first CFC in April 2021 in Monroe, Ohio. That was followed by centers in Groveland, Fla., and Forest Park, Ga. (Atlanta). The Dallas fulfillment center is slated to open this spring, with additional customer fulfillment centers slated for California; Frederick, Md.; Phoenix; Pleasant Prairie, Wis.; Romulus, Mich. (Detroit) as well as South Florida and in the Northeast and West.
“We continue to be pleased with the rollout of our customer fulfillment centers in Groveland, Fla., and Monroe, Ohio, which are both exceeding internal expectations, and our most recent facility opening in Forest Park, Ga.,” continued Arreaga. “We’ve experienced incredible Net Promoter Scores, and our customers tell us they love our friendly, professionally trained drivers and their refrigerated delivery vans that bring the freshest food directly to their doorsteps. We’re eager to continue expanding our fulfillment network and entering into both existing and new geographies through hub-and-spoke facilities.”
Kroger’s grocery delivery network relies on highly automated fulfillment centers, developed as part of the retailer’s partnership with Ocado, a U.K.-based technology company specializing in e-commerce solutions.
“At the hub sites, more than 1,000 bots whizz around giant 3D grids,” the retailer explains. “The grid contains totes with products and ready-to-deliver customer orders. As customers’ orders near their delivery times, products are sorted for delivery at pick stations, then loaded into a temperature-controlled delivery van, which can store up to 20 orders. Machine learning algorithms optimize delivery routes, considering factors such as road conditions and optimal fuel efficiency. Vans may travel up to 90 miles with orders from the hub and spoke facilities, respectively, to make deliveries. Associates at the spoke facility will deliver orders within their service area, adding ZIP codes as demand grows.”
