The Kroger Co., No. 13 in the 2020 Digital Commerce 360 Top 1000, continues to move ahead with a plan to build automated ecommerce fulfillment centers across the 35 states the grocery retailer serves.
Kroger and British online grocery retailer and technology vendor Ocado Group Plc (No. 25 in the Digital Commerce 360 Europe 500) plan to build the centers in the West, Pacific Northwest and Great Lakes regions of the United States. The new center in the West will measure 300,000 square feet, the Pacific Northwest center will be 200,000 square feet and the facility in the Great Lakes region facility will be 150,000 square feet. Kroger did not disclose the exact locations but says it plans to reveal them soon.
The newly planned facilities join six similar facilities now planned or under construction. Those previously announced sites are Monroe, Ohio; Groveland, Florida; Fredericksburg, Maryland; Atlanta, Georgia; Dallas, Texas; and Pleasant Prairie, Wisconsin. Kroger has said its goal is to build 20 “Ocado-powered” ecommerce fulfillment centers in the United States. Each fulfillment center will use Ocado’s robotic warehouse technology.
Kroger says the center in Monroe, Ohio, a suburb of Cincinnati, will be the first to open in early 2021. The retailer also plans to make it operational in early 2021.
In May 2018, Kroger agreed to buy a stake in Ocado and license the British grocer’s automated warehouse technology, designed to fulfill online orders for delivery to consumers’ doors. The deal was Ocado’s first in the United States. Under the terms of the agreement, Kroger became Ocado’s exclusive U.S. partner.
Kroger operates grocery stores under a variety of banner names, such as Pick ‘n Save, Ralphs and Mariano’s.
The state of online grocery sales
While Kroger planned the robotic fulfillment centers long before the coronavirus hit the United States, Kroger’s announcement comes at a time when the pandemic has generated enormous growth in online grocery sales.
In May, U.S. online grocery sales reached a record of $6.6 billion, according to a survey fielded May 20 through May 22 by grocery ecommerce consulting firm Brick Meets Click and grocery ecommerce platform Mercatus. That was an increase of 24.5% over the previous record of $5.3 billion in online grocery sales a month earlier.
An 18% increase in the total number of orders in the past 30 days (73.5 million in May vs. 62.5 million in April) and higher spending per order ($90 in May vs. $85 in April), drove the May increase in online grocery sales, according to Brick Meets Click. Also, the number of customers who ordered groceries online for delivery or pickup rose by 7.5% in May, reaching 43 million, up from 40 million in April, the survey found.
In May, households buying groceries online placed an average of 1.7 orders online grocery orders per household for either delivery, up from the average of 1.6 in April, Brick Meets Click says.Favorite