Kroger breaks ground on $55 million high-tech customer-fulfillment center

The Kroger Co. is putting an innovative spin on fulfillment.

The supermarket giant and Ocado, one of the world's largest dedicated online grocery retailers, have broken ground on what Kroger described as America's first customer fulfillment center (CFC). The center — an automated warehouse facility with digital and robotic capabilities — is also known as a “shed.” Kroger is investing $55 million to build the 335,000-sq.-ft. facility, which is being constructed in Monroe, Ohio.

Kroger tapped Ryan Companies US to design and build the high-tech facility, with the design serving as a model for future projects. The grocer said it intends to open 20 CFCs to support its vision “to create a seamless customer experience.” Two additional locations have already been selected, in the Central Florida and Mid-Atlantic regions.

Kroger and Ocado entered into an exclusive partnership in May 2018, in a deal that enables Kroger to leverage Ocado’s smart platform that supports online ordering, automated fulfillment and home delivery capabilities.

Building new technologically advanced CFCs is part of a larger strategy, called “Restock Kroger,” which the company introduced in October 2017. In particular, the CFCs align with Restock Kroger priorities to fund technology and infrastructure upgrades, as well as to leverage robotics and artificial intelligence to transform the customer experience.

"Our partnership with Ocado will introduce transformative ecommerce, fulfillment and logistics technology in the U.S. and bring customers fresher food faster than ever before, accelerating our ability to provide anything, anytime, anywhere,” said Rodney McMullen, Kroger's chairman and CEO.

"This is a historic moment for our partnership,” added Luke Jensen, CEO of Ocado Solutions. “In a fast-developing landscape for grocery retail, Kroger's determination to continue delivering the best experience for its customers, online as in stores, is unparalleled.”