Kroger Distribution Network Expands to Central Ohio
CINCINNATI – The Kroger Co. (NYSE: KR), America’s largest grocery retailer, today announced it will offer delivery to more Americans with the addition of a hub-and-spoke facility in central Ohio powered by the Ocado Group (LSE: OCDO). The addition of a delivery “radius” brings innovation and modern e-commerce to the central Ohio region, including Columbus, and will expand the grocer’s reach and ability to provide fresh and friendly to its customers.
“We are proud to expand Kroger’s fulfillment network in our home country,” said Gabriel Arreaga, Kroger’s senior vice president and chief supply chain officer. “The new service is an innovative addition to the expanding digital shopping experience offered to Kroger customers. Our delivery business continues to accelerate with the growth of fulfillment facilities and shelves. This expansion will reinforce our commitment to creating career opportunities and quickly serving fresh food to shoppers through interconnected, automated and last-mile solutions across America.
The 61,000 square foot facility located on Shook Rd in Lockbourne will work together to deliver hub in Monroe, Ohio and serve as a last-mile transshipment location that effectively extends the reach of the distribution network to customers up to 200 miles from the hub. At full capacity, customers in over 250 Central Ohio ZIP codes can experience Kroger delivery. The facility will employ up to 200 associates.
“When our customers think of food, they think of Kroger,” continued Arreaga. customers anything, anywhere, anytime.”
The opening of the Columbus-area distribution center follows another e-commerce achievement for the area grocer, the recent launch of the annual Boost by Kroger Plus membership program. For $59 or $99 per year, Boost offers customers access to benefits such as free shipping and 2 fuel points for every dollar spent on groceries and general merchandise purchases through delivery, pickup and in-store at your local Kroger.
“We are proud that the nation’s largest food retailer is headquartered in Ohio, where Kroger continues to evolve its national growth strategy,” said JP Nauseef, President and CEO of Jobs Ohio. “This new state-of-the-art spoke facility in the Columbus area will connect more people to fresh food, create hundreds of jobs, and drive efficiencies for Kroger customers in Ohio.”
Kroger Delivery Explained
The expansion into central Ohio represents an extension of a partnership between Kroger and Ocado, a global technology leader for grocery e-commerce. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics and automation in a bold new way, bringing one-of-a-kind technology in America. Kroger Chairman and CEO Rodney McMullen said Kroger Delivery “supports the ongoing shift in grocery consumer behavior and elevates our position as one of America’s leading e-commerce companies.” Thanks to the delivery network, the company now serves customers in Florida, for example, without traditional brick-and-mortar stores.
The delivery network relies on highly automated distribution centers. At hub sites, more than 1,000 bots circle giant 3D grids, orchestrated by proprietary air traffic control systems in the unlicensed spectrum. The grid, known as The Beehive, contains bins with products and customer orders ready for delivery.
As customer orders approach their delivery times, the bots pick up products from The Beehive and are presented to pick stations for items to be sorted for delivery, an algorithm-driven process that ensures items are packaged intelligently. For example, fragile items are placed on top, bags are weighed evenly, and each order is optimized to fit in the fewest number of bags, reducing plastic usage.
After being packed, the groceries are loaded into a refrigerated delivery van, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, taking into account factors such as road conditions and optimum fuel efficiency. The vans can travel up to 90 miles with hub controls and hub-and-spoke facilities to make deliveries. Spokesperson associates will deliver orders within their service area, adding postcodes as demand increases.
Kroger currently operates customer processing centers in Monroe, OH, Groveland, FL, Forest Park, GA (Atlanta), and Dallas, TX with additional customer processing centers planned for California, Frederick, MD, Phoenix, AZ, Pleasant Prairie, WI, Romulus, MI (Detroit), Cleveland, OH, Charlotte, NC as well as South Florida and the Northeast.
At Kroger Co. (NYSE: KR), we are Fresh for Everyone™ and dedicated to our purpose: Feeding the Human Spirit®. We are, in our family of companies, nearly half a million associates who serve more than 11 million customers daily through a seamless shopping experience under a variety of banner names. We are committed to building #ZeroZeroWaste Hunger communities by 2025. To learn more about us, visit our writing and investor relations to place.
About Ocado Group
Ocado Group is a UK-based technology company admitted to trading on the London Stock Exchange (Ticker OCDO). It provides comprehensive online shopping fulfillment solutions to some of the world’s largest food retailers and owns a 50% share of Ocado Retail Ltd in the UK through a joint venture with Marks & Spencer. Ocado has spent two decades innovating for online grocery, investing in a broad area of technology that includes robotics, artificial intelligence and machine learning, simulation, forecasting and edge intelligence.