Kroger to open another high-tech fulfillment center

Dan Berthiaume
Senior Editor, Technology
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Kroger is opening its newest Customer Fulfillment Center in North Carolina.

The Kroger Co. continues to expand its “customer fulfillment center” footprint.

The company’s newest CFC will be located in Raleigh, N.C. 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 planned North Carolina facility will measure 200,000 sq. ft. It is expected to become operational within 24 months after the site breaks ground and will employ up to 700 associates over the next five years.

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.

CFC also represents one of the models engineered for the grocer’s flexible, vertically integrated Kroger Delivery network, which will also include smaller automated facilities and spoke locations. 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. 

As part of its strategy to expand Kroger Delivery and the CFC model supporting it, the company recently announced plans to enter the Northeast for the first time, offering Kroger Delivery enabled by a CFC. Kroger will also expand its existing operations and boost capacity in California with the addition of two medium- and smaller-sized CFCs.

“The acceleration of our delivery business continues with the development of an additional customer fulfillment center, advancing our commitment to creating career opportunities and serving shoppers fresh food fast through interconnected, automated, and innovative facilities and last-mile solutions across America," said Gabriel Arreaga, Kroger senior VP and chief supply chain officer. "The company looks forward to serving new and existing customers across North Carolina."

"We're excited to come to North Carolina in partnership with Kroger," said Luke Jensen, CEO of Ocado Solutions. "As demonstrated by the two state-of-the-art CFCs already live in other parts of the country, Ocado is helping Kroger to establish a new high-bar in the type of quality and service that U.S. grocery shoppers can receive online. We can't wait for customers across North Carolina to experience online delivery, enabled by Ocado's unique technology."

Kroger Fulfillment Network currently operates CFCs in Groveland, Fla., and Monroe, Ohio; and is slated to open sites in California, Dallas, Forest Park, Ga. (Atlanta), Frederick, Md., Phoenix, Pleasant Prairie, Wis., Romulus, Mich. (Detroit), as well as South Florida and the Northeast, Pacific Northwest, and West.

Kroger employs nearly half a million associates and operates almost 2,800 stores under a variety of banners that include Kroger, Ralphs, Dillons, Smith’s, King Soopers, Floors 4 Less, Fry’s, Harris Teeter, Fred Meyer and others.