Dive Brief:
- Kroger has started providing grocery delivery service in central Ohio using a new “spoke” facility located just outside Columbus, the state’s largest city and its capital, the supermarket chain announced on Wednesday.
- Assembled orders arrive at the 61,000-square-foot facility from Kroger’s robotic customer fulfillment center (CFC) in Monroe, Ohio, and are then transferred to refrigerated vans for delivery to customers.
- The addition of the facility reflects a broad push by Kroger to strengthen its position in grocery e-commerce by relying on both specialized order-processing infrastructure and the company’s supermarkets to fill orders.
Dive Insight:
Kroger’s new spoke center is the latest step in the retailer’s effort to bolster its grocery-delivery capabilities by expanding the reach of its growing network of automated order-assembly hubs.
The facility in Lockbourne, Ohio, allows Kroger to transport orders originating from the Monroe CFC to customers located up to 200 miles away from the hub, according to the announcement. The new fulfillment operation, which is about 85 miles from Monroe via Interstate 71, will serve more than 250 ZIP codes in central Ohio and employ up to 200 workers, Kroger said.
In December, Kroger opened a spoke center in Indianapolis to handle orders put together at the Monroe CFC. In addition, Kroger said in January that it plans this year to open a spoke facility in Louisville, Kentucky, that will also be linked with the Monroe warehouse.
Kroger also operates spoke sites in Jacksonville and Tampa, Florida, both of which are within range of a CFC it runs in Groveland, Florida.
Kroger's spoke facilities are designed to serve as cross-docks for orders put together at the retailer's CFCs by fleets of robotic vehicles supplied by U.K.-based robotics company Ocado. The robots travel across a grid to gather products and bring the items to pick stations to be prepared for delivery directly to customers or to the spoke centers, which also use Ocado's technology.
Kroger operates CFCs in Dallas and Forest Park, Georgia, in addition to the Monroe and Groveland centers. The company is also developing CFCs in a number of other locations around the United States, including North Carolina, California, Maryland, Arizona, Michigan and Wisconsin. The grocery company also has another planned for Ohio — in Cleveland — along with CFCs coming to South Florida and the Northeast.
Beyond working with Ocado to build spoke facilities and CFCs, Kroger is deploying technology from the robotics specialist to drive a micro-fulfillment center in South Florida, a region where it doesn’t operate brick-and-mortar supermarkets.
Kroger said last year it expects its online sales to top $20 billion by the end of 2023 — twice the level it recorded in 2020.
