CINCINNATI and ORLANDO, Fla., March 4,
2022 /PRNewswire/ -- The Kroger Co. (NYSE: KR), America's
largest grocery retailer, today announced at its 2022 Business
Update in Orlando it will offer
more Americans delivery through the addition of spoke
facilities in Austin and San
Antonio, TX and Birmingham,
AL powered by the Kroger Fulfillment Network and Ocado Group
(LSE: OCDO). As a continuation of Kroger's successful entry into
Florida in 2021 without physical
stores, the new Texas and
Alabama facilities will serve as
new geographies for the organization, bringing innovation and
modern e-commerce to the cities and extending the grocer's reach
and ability to provide customers anything, anytime, anywhere.
"Kroger today looks very different than it did in 1883 when we
opened our first store. But the core principles that made that
store successful – service, selection, value, and our commitment to
our customers – remain the bedrock of our business," said
Rodney McMullen, Kroger's chairman
and CEO.
"I'm incredibly excited for the future of Kroger, and both
thriving physical stores and digital solutions are part of it. We
continue to feel great about the momentum we're experiencing with
Kroger Delivery and our partnership with Ocado, supporting Kroger
in strategically leveraging our unique assets to expand in existing
regions, including Atlanta,
Cincinnati and Dallas, as well as enter into new geographies
like Austin, Birmingham, Cleveland, Oklahoma
City, Orlando, San Antonio, South
Florida, and the Northeast through a flexible network
of differently sized, high-tech facilities operated by friendly and
knowledgeable associates," continued McMullen.
Austin, Texas
The 70,000-square-foot
spoke facility in northeast Austin, pending finalization of lease
negotiation, will collaborate with the hub in Dallas, TX, serving as a last-mile cross-dock
location that efficiently expands Kroger's grocery delivery
services. The facility is expected to become operational later this
year and will create up to 161 job opportunities.
San
Antonio, Texas
The 67,000-square-foot spoke facility
in northeast San Antonio, pending
finalization of lease negotiation, will also collaborate with the
hub in Dallas, TX, serving as a
last-mile cross-dock location that efficiently expands Kroger's
grocery delivery services. The facility is expected to become
operational later this year and will create up to 161 job
opportunities.
Birmingham, Alabama
The
50,000-square-foot spoke facility, located at 30 West Oxmoor Road
in Birmingham, AL, will also
collaborate with the hub in Forest Park,
GA (Atlanta), serving as a
last-mile cross-dock location that efficiently expands Kroger's
grocery delivery services. The facility is expected to become
operational later this year and will create up to 161 job
opportunities.
"Kroger's digital investments are focused on driving expanded
capacity, improving the customer experience, and developing new,
innovative propositions via our strategic partnerships, including
our Kroger Delivery fulfillment network powered by Ocado
technologies," said Yael Cosset, Kroger's chief information officer
and chief digital officer. "Kroger's growing seamless ecosystem
continues to scale and allow us to reach customers who are not in
the proximity of a store with delivery services, and we're
committed to doubling both our digital sales and profitability
passthrough rate by the end of 2023 and our continued network
expansion will help us reach this target."
"We're excited to continue extending the Kroger fulfillment
network, with dedicated facilities of various sizes providing added
scale, reliability of experience, and benefit of automation and
wide customer reach, in both current operating regions as well as
in new parts of the U.S.," said Gabriel Arreaga, Kroger's
senior vice president and chief supply chain officer. "This network
is enabling Kroger to create thousands of technology, operations,
logistics, and customer care jobs and improve access to fresh food
in cities eager for the variety and value offered by Kroger that
once could only be accessed through our stores."
Kroger Delivery Explained
This expansion represents an extension of a partnership between
Kroger and Ocado, a world leader in technology 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
first-of-its-kind technology to America. Through the hub-and-spoke
delivery network, the organization now serves customers in
Florida, as an example, without
traditional brick-and-mortar stores.
The delivery network relies on highly automated fulfillment
centers. At the hub sites, more than 1,000 bots whizz around 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 bots
retrieve products from The Hive and are presented
at pick stations for items to be sorted for delivery, a process
governed by algorithms that ensures items are intelligently packed.
For example, fragile items are placed on top, bags are evenly
weighted, and each order is optimized to fit into the lowest number
of bags, reducing plastic use.
After being packed, groceries are loaded into a refrigerated
delivery van, which can store up to 20 orders. Powerful machine
learning algorithms optimize delivery routes, considering factors
like road conditions and optimal fuel efficiency. Drivers may
travel up to 90 miles with orders from facilities to make
deliveries.
Kroger unveiled its Monroe,
Ohio customer fulfillment center in April 2021, its first, followed by centers in
Groveland, FL and Forest Park, GA. The Dallas fulfillment center is slated to open
this spring with additional customer fulfillment centers slated for
California, Frederick, MD, Phoenix, AZ, Pleasant Prairie, WI, Romulus, MI (Detroit), as well as South Florida and the Northeast and West.
Kroger anticipates opening 17 new facilities, including hubs and
spokes, within the next 24 months.
Media Assets
To download Kroger Delivery video and
photography, please visit here.
About Kroger
At The Kroger Co.
(NYSE: KR), we are dedicated to our Purpose: to Feed the Human
Spirit™. We are, across our family of companies, nearly half a
million associates who serve over nine million customers daily
through a seamless digital shopping experience and 2,800 retail
food stores under a variety of banner names, serving America
through food inspiration and uplift, and creating
#ZeroHungerZeroWaste communities by 2025. To learn more about us,
visit our newsroom and investor relations site.
About Ocado Group
Ocado Group is a UK based technology
company admitted to trading on the London Stock Exchange (Ticker
OCDO). It provides end-to-end online grocery fulfilment solutions
to some of the world's largest grocery retailers and holds a 50%
share of Ocado Retail Ltd in the UK in a Joint Venture with Marks
& Spencer. Ocado has spent two decades innovating for grocery
online, investing in a wide technology estate that includes
robotics, AI & machine learning, simulation, forecasting, and
edge intelligence.
Safe Harbor
This press release contains certain
statements that constitute "forward-looking statements" about the
future performance of the company. These statements are based on
management's assumptions and beliefs in light of the information
currently available to it. Such statements are indicated by words
or phrases such as "committed," "contemplates," "continue,"
"enable" "expect," "focused," "target," and "will." Various
uncertainties and other factors could cause actual results to
differ materially from those contained in the forward-looking
statements. These include the specific risk factors identified in
"Risk Factors" in our annual report on Form 10-K for our last
fiscal year and any subsequent filings, as well as the
following:
Kroger's ability to achieve sales, earnings, incremental FIFO
operating profit, and adjusted free cash flow goals may be affected
by: COVID-19 pandemic related factors, risks and challenges,
including among others, the length of time that the pandemic
continues, future variants, mutations or related strains of the
virus and the effectiveness of vaccines against variants, continued
efficacy of vaccines over time and availability of vaccine
boosters, the extent of vaccine refusal, and global access to
vaccines, as well as the effect of vaccine and/or testing
mandates and related regulations, the potential for additional
future spikes in infection and illness rates including breakthrough
infections among the fully vaccinated, and the corresponding
potential for disruptions in workforce availability and customer
shopping patterns, re-imposed restrictions as a result of
resurgence and the corresponding future easing of restrictions, and
interruptions in domestic and global supply chains or capacity
constraints; whether and when the global pandemic will become
endemic, the pace of recovery when the pandemic subsides or becomes
endemic, which may vary materially over time and among the
different regions we serve; labor negotiations; potential work
stoppages; changes in the unemployment rate; pressures in the labor
market; changes in government-funded benefit programs; changes in
the types and numbers of businesses that compete with Kroger;
pricing and promotional activities of existing and new competitors,
including non-traditional competitors, and the aggressiveness of
that competition; Kroger's response to these actions; the state of
the economy, including interest rates, the current inflationary
environment and future potential inflationary and/or deflationary
trends and such trends in certain commodities, products and/or
operating costs; the geopolitical environment; unstable political
situations and social unrest; changes in tariffs; the effect that
fuel costs have on consumer spending; volatility of fuel margins;
manufacturing commodity costs; diesel fuel costs related to
Kroger's logistics operations; trends in consumer spending; the
extent to which Kroger's customers exercise caution in their
purchasing in response to economic conditions; the uncertainty of
economic growth or recession; stock repurchases; changes in the
regulatory environment in which Kroger operates; Kroger's ability
to retain pharmacy sales from third party payors; consolidation in
the healthcare industry, including pharmacy benefit managers;
Kroger's ability to negotiate modifications to multi-employer
pension plans; natural disasters or adverse weather conditions; the
effect of public health crises or other significant catastrophic
events; the potential costs and risks associated with potential
cyber-attacks or data security breaches; the success of Kroger's
future growth plans; the ability to execute our growth strategy and
value creation model, including continued cost savings, growth of
our alternative profit businesses, and our ability to better serve
our customers and to generate customer loyalty and sustainable
growth through our strategic moats of fresh, our brands,
personalization, and seamless; and the successful integration of
merged companies and new partnerships. Our ability to achieve these
goals may also be affected by our ability to manage the factors
identified above. Our ability to execute our financial strategy may
be affected by our ability to generate cash flow.
Kroger assumes no obligation to update the information contained
herein unless required by applicable law. Please refer to Kroger's
reports and filings with the Securities and Exchange Commission for
a further discussion of these risks and uncertainties.
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SOURCE The Kroger Co.