CINCINNATI, April 14, 2021 /PRNewswire/ -- The Kroger
Co. (NYSE: KR), America's largest grocery retailer, is launching
the country's first Customer Fulfillment Center (CFC), combining
vertical integration, machine learning, and robotics with
affordable, friendly, and fast delivery service for fresh food.
Located in Monroe, OH – a city
north of Cincinnati – and powered
by Ocado Group (LSE: OCDO), a world leader in technology for
grocery e-commerce, the CFC is the first to open, transforming and
supporting the grocer's thriving digital business.
"2020 was a pivotal year for grocery e-commerce, with Kroger's
digital business scaling to over $10
billion—and achieving a record digital sales increase of 116%,"
said Rodney McMullen, Kroger's
chairman and CEO. "We're incredibly proud to achieve this milestone
that advances our position as one of America's leading e-commerce
companies. The momentum we're experiencing is well-timed with the
evolution of Kroger Delivery, underpinning the permanent shift in
grocery consumer behavior and need for enterprising and modern
e-commerce and last-mile solutions—today's true competitive
horsepower.
"It's truly uplifting to reach this moment in Kroger's history –
better yet grocery industry history – with our partners at Ocado.
We're appreciative of Tim Steiner
and Luke Jensen's collaboration to
accomplish the next step in the expansion of our seamless
ecosystem."
In May 2018, Kroger and Ocado
formed an exclusive partnership to introduce to the U.S. for the
first time proprietary technology solutions focused on artificial
intelligence, advanced robotics and automation, and creative
solutions to create more seamless and efficient fulfillment,
picking and delivery capabilities to provide customers anything,
anytime, anywhere and expand Kroger's reach and products to new
geographies.
"The introduction of the first Customer Fulfillment Center marks
a historic milestone for grocery retail in the U.S.," said
Tim Steiner, Co-founder and CEO of
Ocado Group. "Since signing our partnership in 2018, Ocado and
Kroger teams have worked in tight-knit collaboration to lay the
foundation to advance their state-of-the-art fulfillment ecosystem
across the country, supporting Kroger to reach customers anywhere
with anything, at any time.
"This moment marks the next phase of our partnership, and it
comes against the backdrop of soaring demand for online grocery
options in the U.S. and worldwide. In the coming years, we will
open more automated CFCs across a range of sizes with Kroger.
We will also roll out components of our software solutions to
stores in collaboration with Kroger's existing seamless platform to
support fulfillment of curbside pickup orders. The breadth of this
fulfillment ecosystem will be crucial in helping Kroger to continue
to win in e-commerce across the U.S."
Kroger Delivery Operations
Kroger Delivery is a
vertically integrated network, enabling coverage of up to 90 miles
from the hub location and significantly more territory when spoke
locations are integrated. In these highly automated Customer
Fulfillment Centers, over 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, orders are loaded into a
temperature-controlled Kroger Delivery van, which can store up to
20 orders. Powerful machine learning algorithms dynamically
optimize delivery routes, considering factors like road conditions
and optimal fuel efficiency.
The Monroe CFC measures 375,000 square feet, carries thousands
of popular grocery products, and represents one of the models
engineered for the flexible Kroger Delivery network, which will
also include smaller facilities as well as spoke locations. The CFC
can fulfill thousands of orders per day and has the capability to
support fulfillment of pickup orders.
The Groveland, FL CFC – a city
west of Orlando and a new
geography for Kroger – is scheduled to open to customers this
spring. Kroger has also announced plans to open CFCs in
Dallas, TX; Forest Park, GA (Atlanta); Frederick, MD; Phoenix, AZ;
Pleasant Prairie, WI; and
Romulus, MI (Detroit); and Pacific Northwest and West
regions. As the network expands, Kroger will announce additional
locations.
"We're excited to be building a distribution network that
creates a more equitable food system by providing greater
accessibility to fresh food through the power of innovation," said
Gabriel Arreaga, Kroger's senior
vice president and chief supply chain officer. "Kroger Delivery's network of Customer
Fulfillment Centers will accelerate our e-commerce capabilities,
focusing on more cost-effective supply chain and last-mile delivery
solutions, seamless customer experiences and new career
opportunities."
Kroger Delivery Associate Experience
Talent on
Kroger's supply chain, technology and digital, data and analytics,
human resources, operations, and
merchandising teams are partnering to design the Kroger Delivery
network.
"Kroger is uniquely positioned to transform grocery e-commerce
because of our innovative and knowledgeable delivery associates'
commitment to providing fresh food and delivering a rewarding
customer experience," continued McMullen. "Kroger Delivery brings
together the expertise of our team and the efficiency of technology
to create an in-stock, fresh and friendly experience for every
customer, every time."
At every CFC, on-site associates will support delivery
operations and help process, package, and load orders. The Monroe
CFC will employ nearly 400 associates, with roles focusing on
customer service and engagement, engineering, operations, inventory
and quality management, and transportation. To view available
careers, visit Jobs.Kroger.com.
Kroger Delivery Customer Experience
"We more than
doubled our e-commerce business last year and through our
industry-leading seamless ecosystem, we continue to provide fresh
food to our customers in a way that fits the structure of their
day—whether it's coming to our stores, picking it up, delivering to
a convenient location, or directly shipping products to their
homes," said Yael Cosset, Kroger's senior vice president and chief
technology and digital officer. "The Kroger Delivery network
leverages our proprietary set of assets and enables us to increase
customer reach, concentrating on availability, proximity and
convenience for communities in both existing and new geographies
like Florida."
Starting this spring, the Monroe and Groveland CFCs will begin
fulfilling orders for customers. After placing an order via
Kroger.com or the Kroger app, customers in regions where there is a
CFC will have their groceries delivered by a knowledgeable Kroger
Delivery associate in a temperature-controlled van. The Kroger
Delivery associate will deliver industry-leading customer service,
including ensuring order freshness and satisfaction, managing order
changes, and informing customers of their loyalty membership
benefits like earned fuel points and digital coupon
savings. The Kroger Delivery network will also continue to
leverage stores and third-party partners to deliver certain
orders.
As part of Kroger's commitment to provide a differentiated and
affordable grocery delivery experience for
customers, Kroger Delivery
will offer variable delivery fees that do not require customers to
provide a tip and are influenced by a number of factors like a
customer's loyalty, delivery window popularity, route optimization
as well as the lead time of an order. Variable delivery fees will
allow Kroger Delivery to
provide additional discounted options where it has the flexibility,
creating a personalized offering and delivering value to customers
in ways that matter to them.
Media Assets
To download Kroger Delivery video and
photography, please visit here.
About The Kroger Co.
At The Kroger Co.
(NYSE: KR), we are Fresh for Everyone™ and dedicated to our
Purpose: To Feed the Human Spirit®. We are, across our family
of companies, nearly half a million associates who serve 60 million
households annually through a seamless shopping experience under a
variety of banner names. We are committed to 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 fulfillment 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 Language
This press release contains certain statements that constitute
"forward-looking statements" about the company's operations. 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 "achieve," "believe,"
"contemplates," "continue," "deliver," "expect," "future,"
"guidance," "strategy," "target," "trends," 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 our performance,
including our ability to successfully execute our e-commerce
strategy. Kroger assumes no obligation to update the information
contained herein. 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.