Kroger opens next-gen fulfillment hub in Detroit

The Kroger Co. is bringing fast online delivery to another major Midwest metro area.

America's largest grocery retailer is opening its newest Customer Fulfillment Center (CFC) in Romulus, Mich., part of the Greater Detroit area. The approximately 135,000-square-foot facility will reach customers up to 90 minutes from the site.

The new facility will employ more than 700 associates as Kroger continues to expand its fast online delivery services in southeast Michigan. In June 2022, Kroger opened another Midwest CFC in the Village of Pleasant Prairie, Wis. a city centrally located between Milwaukee and Chicago. 

Kroger Delivery utilizes the CFC model, first introduced in partnership with U.K.-based online grocer Ocado in May 2018. The model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food. 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. 

The delivery network relies on automated fulfillment centers where more than 1,000 bots whizz around 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 delivery times, the bots retrieve products from The Hive and are presented at pick stations for items to be sorted for delivery, a process governed by algorithms designed to ensure that items are intelligently packed.

For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the lowest number of bags, reducing plastic use. After being packed, groceries are loaded into a refrigerated delivery van, which can store up to 20 orders. Machine learning algorithms optimize delivery routes, considering factors like road conditions and optimal fuel efficiency. Drivers may travel up to 90 miles with orders from facilities to make deliveries.

“Kroger has served customers in the state of Michigan for more than a century and we are thrilled to bring Kroger Delivery to greater Detroit," said Bill Bennett, Kroger VP and head of e-commerce. "We are passionate about delivering a fresh, convenient customer shopping experience with zero compromise on quality, selection, and affordability. From the refrigerated trucks, to the trained and uniformed drivers, to the white glove delivery experience at the door, Kroger Delivery brings that same zero compromise experience to a new delivery option for customers.  This new offering builds on all the other benefits of shopping Kroger online, including an entirely personalized shopping experience, easy digital coupons, valuable fuel points, and fresh, high-quality products, shoppable on the Kroger app or on Kroger.com.”

"Ocado's world-leading technology is already powering CFCs with Kroger across six states and supporting Kroger Delivery to bring a world-leading service to multiple new and existing Kroger markets around the country," said Luke Jensen, CEO of Ocado Solutions. "Our CFC in Romulus is already bringing a game-changing online grocery experience to customers in the greater Detroit area, and we look forward to bringing this to Kroger customers from coast to coast across the U.S. as our partnership continues to grow."

Kroger currently operates CFCs in Monroe, Ohio; Groveland, Fla.; Forest Park (Atlanta); Pleasant Prairie, Wis., Dallas; and Romulus (Detroit); with additional customer fulfillment centers slated for California; Frederick, Md; Phoenix; Cleveland; Charlotte, N.C.; Aurora (Denver); South Florida; and the Northeast.

Based in Cincinnati, Kroger operates 2,800 stores under a variety of banners in 35 U.S. states, including Kroger, Fred Meyer, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Owen's, Jay C, Pay Less, Baker's, Gerbes, Harris Teeter, Pick 'n Save, Metro Market, and Mariano's.

Kroger recently agreed to buy Boise, Idaho-based grocery retailer Albertsons Companies for $34.10 a share in a deal valued at $24.6 billion.  

[Read more: Kroger in blockbuster deal to buy Albertsons]