Dive Brief:

• Kroger plans to build an automated customer fulfillment center (CFC) in Concord, North Carolina, in partnership with Ocado, according to press releases from Kroger and the state's governor on Wednesday.
• The 200,000-square-foot facility is slated to open within two years after construction starts and employ as many as 700 people over five years, Kroger said.
• The announcement from Kroger confirms disclosed plans late last year to place a CFC in the South.

Dive Insight:

Kroger's upcoming high-tech order-preparation facility will be located within range of Charlotte — North Carolina's largest city and a vibrant grocery market where the supermarket operator faces competition from a range of competitors, from Publix to Food Lion.

Like other customer fulfillment centers Kroger is developing with Ocado, the North Carolina facility will use a fleet of unmanned vehicles that zip around a grid to collect items for grocery orders. The technology is designed to allow the grocer to automatically put together orders in minutes and efficiently serve customers who may be located 90 or more miles away. The machine-learning-based facilities can also handle pickup orders for stores.

Kroger has said it intends to use the unfolding network of robotic fulfillment centers it is rolling out, which includes smaller-sized facilities in addition to sprawling sites like the one the company is preparing to build in North Carolina, to enhance its agility in e-commerce. Kroger's digital sales have decelerated in 2021, but Kroger Chief Financial Officer Gary Millerchip said during the company's third-quarter earnings call earlier this month that the retailer is on pace to double its online sales and profitability by 2023.

Kroger already runs CFCs in Groveland, Florida, and Monroe, Ohio, and plans to open sites in Pleasant Prairie, Wisconsin; Frederick, Maryland; the Atlanta and Detroit areas; California; Dallas and Phoenix. The company has also said it intends to place sites in unidentified parts of the Northeast, Pacific Northwest, South Florida and West.

Kroger received incentives from North Carolina in return for building the new CFC in the state. According to a press release from the office of Gov. Roy Cooper, Kroger could receive up to $2.3 million in reimbursement over 12 years through a Job Development Investment Grant approved on Wednesday by the state’s Economic Investment Committee.

Average annual pay for workers at the CFC, including healthcare and other benefits, will exceed the $41,255 average for workers in Cabarrus County, North Carolina, where the facility will be located, according to the governor's office.