OPERATIONS

Kroger breaks ground on high-tech fulfillment center

BY Dan Berthiaume

The Kroger Co. is officially building the second of 20 planned automated warehouse facilities.

The supermarket giant and Ocado, one of the world’s largest dedicated online grocery retailers, have broken ground on what it called America’s second “customer fulfillment center” (CFC), located in Groveland, Florida – a new market for the retailer. The $55 million center, expected to become operational in 2021, will measure up to 375,000-sq.-ft. and is expected to generate up to 400 new jobs.

Kroger’s first CFC – an automated warehouse facility with digital and robotic capabilities, also known as a shed – is being constructed in Monroe, Ohio. The CFC model is now being replicated in Groveland and will continue in cities across the U.S.

Kroger intends to open 20 CFCs as it transforms to become an omnichannel retailer. Two additional sites have been named in Forest Park, Georgia, and in the mid-Atlantic region.

“Kroger is excited to enter Florida to redefine the customer experience through our industry-leading partnership with Ocado,” said Rodney McMullen, Kroger chairman and CEO. “There’s a substantial demand for Kroger products and services in the state, and we’re eager to offer a new and seamless experience through the customer fulfillment center, leveraging advanced robotics technology and creative solutions to provide customers with anything, anytime, anywhere.”

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.

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