Dive Brief:
- Kroger has opened spoke delivery facilities in Nashville, Tennessee, and Maywood, Illinois, extending the reach of its automated online grocery delivery network to two additional metropolitan areas, the grocer announced Tuesday.
- The Tennessee facility will serve as a cross-dock for orders prepared at Kroger’s robotic customer fulfillment center (CFC) in Forest Park, Georgia, while the Illinois spoke center will operate in conjunction with a CFC in Pleasant Prairie, Wisconsin.
- Kroger is bolstering its e-commerce capabilities as the company looks to reverse the decline in online sales it has seen this year even as overall revenue has increased.
Dive Insight:
The new assets join the growing number of digital order-processing facilities Kroger has been developing in partnership with U.K.-based grocery automation specialist Ocado.
Workers will transfer orders arriving by trucks at the spoke centers to vans for delivery to customers, extending the reach of the robot-powered CFCs they serve.
The hub sites have over 1,000 bots that retrieve products, the company noted. Gabriel Arreaga, Kroger's senior vice president and chief supply chain officer, said in a statement that the network enables Kroger to “add scale, achieve reliability of experience, gain from the benefits of automation and ultimately widen our customer reach in current operating regions and new parts of the U.S."
The spoke facility in Maywood will occupy 80,000 square feet, making it twice as large as the new delivery center in Nashville. Despite the difference in size, however, the facilities will both employ about 180 workers, according to Kroger. The grocer announced in July that it planned to build the facilities but didn’t indicate when they would open.
Kroger noted that the Maywood spoke center, which is located about 20 miles west of Chicago, will serve shoppers in an area that has long had a shortage of grocery stores. “We are happy to welcome a partner that works to address our food desert designation and look to evolving collaboration with them," Maywood Mayor Nathaniel George Booker said in a statement.
David Taube contributed to this report.
