Kroger names more locations for next-gen fulfillment centers

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Kroger names more locations for next-gen fulfillment centers

By Dan Berthiaume - 02/19/2019
The Kroger Co. is moving forward with plans to create a network of 20 high-tech customer fulfillment centers (CFCs).

Partnering with U.K.-based online grocery retailer Ocado, Kroger will open its new two advanced CFCs in the Central Florida and Mid-Atlantic regions. The CFC model is based on an automated warehouse facility with digital and robotic capabilities, also known as a "shed.”

Kroger plans to eventually open 20 CFCs, in partnership with Ocado, to provide omnichannel services to its customers across the entire East Coast. Building new technologically advanced CFCs is part of a larger strategy, called “Restock Kroger,” which the grocery giant 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.

"Kroger is excited to partner with Ocado — one of the most innovative, advanced companies in the world—to redefine the grocery shopping experience for customers along the East Coast," said Rodney McMullen, Kroger's chairman and CEO. "We are incredibly excited to introduce customer fulfillment centers in this region to deliver on our Restock Kroger vision to serve America through food inspiration and uplift."

In November 2018, Kroger announced its first CFC will be constructed in Monroe, Ohio, a suburb north of Cincinnati. Kroger is investing $55 million to build the first facility, which will span 335,000 sq. ft. and is expected to generate more than 410 new jobs, according to the grocer.

Prior to joining forces in May, Kroger already had approximately a 1% stake in Ocado. Through the new deal, Kroger increased its existing investment by 5% in a subscription rights agreement, bringing its total investment to more than 6%.

"Kroger is developing the retail model of the future through our exciting partnership with Ocado, a UK-based company with global ties," said Alex Tosolini, Kroger's senior VP of new business development. "We will co-innovate with Ocado to develop the best possible experiences for our customers, leveraging advanced robotics technology and creative solutions."

"This announcement marks another important step toward combining Kroger's long-standing dedication to innovative and world-class grocery services with Ocado's unique, industry-leading technology," said Luke Jensen, CEO of Ocado Solutions. "As the U.S. retail landscape continues to change, these CFCs will play a crucial role in helping Kroger offer its customers a superior online shopping experience in these two major markets."

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