Kroger extends fast delivery network in Oklahoma

America's largest grocery retailer is extending its flexible, vertically integrated Kroger Delivery network to Oklahoma City.

The Kroger Co. is opening a 50,000-square-foot spoke facility in Oklahoma City which will collaborate with a high-tech customer fulfillment center (CFC) hub in Dallas to fulfill online orders of fresh food. Introduced in partnership with U.K.-based online grocer Ocado in May 2018, the CFC model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food.

The CFC facilities leverage proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce capabilities across the U.S.

Kroger says its entry into Oklahoma, a new geography for the company, is a continuation of its expansion to the new Florida market in 2021. The facility will serve as a last-mile cross-dock location that expands Kroger's grocery delivery services and extends its reach to customers up to 200 miles from the Dallas CFC hub. It is expected to become operational later this year and will employ up to 191 full-time associates.

CFC also represents one of the models engineered for the grocer’s flexible, vertically integrated Kroger Delivery network, which also includes smaller automated facilities and spoke locations, such as the new Oklahoma City facility. In CFCs, more than 1,000 robots traverse giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.

As customers' orders near their delivery times, the robots retrieve products from The Hive, which are presented at stations for items to be sorted for delivery via an algorithmic sorting process. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the fewest number of bags, reducing plastic use.

Once completed, orders are loaded into a temperature-controlled Kroger delivery van, which can store up to 20 orders. Machine learning algorithms dynamically optimize delivery routes, considering factors like road conditions and optimal fuel efficiency. 

Kroger unveiled the CFC model at a Monroe, Ohio fulfillment center in April 2021, its first, followed by another in Groveland, Fla., and metro Atlanta. In January 2022, Kroger opened a smaller automated center in Indianapolis connected to the Monroe facility, as well as a connected Monroe spoke in Louisville, Kentucky.

Kroger also plans additional sites in California, Dallas, Frederick, Md., Phoenix, Pleasant Prairie, Wis., Romulus, Mich. (Detroit), as well as South Florida and the Northeast.

"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 Gabriel Arreaga, Kroger senior VP and chief supply chain officer. "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."

"We continue to be pleased with the rollout of our customer fulfillment centers in Groveland, Florida and Monroe, Ohio, which are both exceeding internal expectations, and our most recent facility opening in Forest Park, Georgia," 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."