Dive Brief:
- Kroger is now delivering online grocery orders to shoppers in South Florida following the opening of a 60,000-square-foot spoke facility in Miami.
- The facility, which staffs around 200 workers, serves as a cross-dock location for Kroger’s automated customer fulfillment center (CFC) in Groveland, Florida.
- Kroger now offers delivery in Central Florida, Tampa, Jacksonville and South Florida through its hub-and-spoke network of facilities.
Dive Insight:
With the addition of its latest spoke facility in Miami, Kroger has continued to assertively expand in the state that has become an important testing ground for its new delivery service.
The new facility is the third one that operates in tandem with its 375,000-square-foot Groveland CFC, marking the most cross-dock connections so far among the company’s four active CFCs. The other Florida spoke facilities are located in Jacksonville and Tampa.
Kroger also operates spoke facilities in Central Ohio and Indianapolis that interface with its CFC in Monroe, Ohio. And it has announced additional spoke facilities in Louisville, Kentucky, and Oklahoma City.
These cross-dock facilities allow Kroger to deliver to customers hundreds of miles away from its CFC hubs, where around 1,000 robots scoot around a giant grid array assembling orders. The Miami spoke, like others, can deliver to shoppers located up to 90 miles away from the facility. Up to 20 orders are packed in each delivery van, which follows a route determined by machine learning algorithms.
Because Kroger doesn’t operate any stores in Florida, the success of Kroger Delivery in the state would be a significant sign of strength for the new service. The company is hoping that its focus on next-day delivery, a wide assortment and competitive pricing — not to mention its proprietary tie-up with British technology firm Ocado — will give it an edge over competitors like Amazon, Walmart and Ahold Delhaize as they, too, try to win over online shoppers.
Kroger is also using its hub-and-spoke online service model as a way to penetrate other markets where it doesn’t operate stores, like Oklahoma. The grocer will also venture into the Northeast, where it has a very limited store footprint, with a CFC that it announced last fall.
In addition to its CFCs in Ohio and Florida, Kroger also operates a CFC in the Atlanta region and one near Dallas. The grocer has also announced several CFCs planned to be located in places such as California, Arizona, Wisconsin, North Carolina and more.
That facility should intensify the company’s online grocery battle with Publix, which recently debuted a dark-store-fueled 15-minute delivery service in Miami in partnership with Instacart.
