The Kroger Co. is betting that artificial intelligence will play a major role in the grocer’s growth story — and recent comments from its executives show how Kroger is using AI to reach its objectives.
Alongside Kroger’s digital sales and grocery delivery, AI routinely appears among its leadership’s points of emphasis in earnings calls. As recently as Sept. 11, the retailer’s interim CEO addressed where his company is focused.
“While we are growing our physical footprint, we’re also modernizing our business to operate more efficiently and serve customers better,” said Ronald Sargent, chairman of the board at Kroger, as well as its interim CEO since March. “Artificial intelligence is one of the key tools to help us get there.”
How Kroger uses AI for fulfillment
“Accelerating our AI efforts is a natural step for Kroger, given our long history of leadership in data and machine learning,” Sargent stated during the September earnings call. “Where we’ve implemented AI in different parts of the organization, we’re seeing results with more competitive pricing, shrink improvements and faster fulfillment, which enables two-hour pickup for customers.”
In fact, AI has played a role in fulfillment for years at Kroger. In April 2021, the company opened its first robotic ecommerce fulfillment center, working with the U.K.-based Ocado Group to integrate AI, robots and automation for the systems there. The 375,000-square-foot fulfillment center in Monroe, Ohio, was the beginning of a major rollout costing billions of dollars. Currently, Kroger has eight customer fulfillment centers operating with Ocado, with two additional sites planned to open in Charlotte and Phoenix, according to Ocado’s website.
Sargent noted that Kroger was engaged in “a full site-by-site analysis of our Kroger automated fulfillment network.” So far, he said that “these facilities deliver better results” in high-density areas.
AI’s role in Kroger’s online marketplace
In 2020, Kroger launched a marketplace to compete with fellow retailers Amazon and Walmart. In 2024, the grocer announced it would work with the technology vendor Intelligence Node to use its analytics technology on Kroger’s marketplace, which was built on Mirakl’s ecommerce platform.
At the time, Kroger touted the clearer, more informative product listings that it would be able to provide to customers. In the meantime, third-party sellers gained AI tools for content management and search optimization.
“The Kroger Marketplace involves a complex matrix of elements that need to be effectively managed to deliver a seamless customer experience online,” said Michael Murphy, a group vice president at Kroger, when the Intelligence Node agreement was announced. “From product copy and ratings to reviews and taxonomy, customers are searching out more information than ever before and providing what they need, when they need it is important.”
AI use cases for Kroger’s data science operations
Asked about how the company was using AI to modernize its operations, David Kennerley, the executive vice president and chief financial officer at Kroger, told investors that the beneficiaries included its data scientists and 84.51° division, which encompasses Kroger Precision Marketing and retail media.
“We’ve deployed an AI tool specifically against shrink, which is an area that we’ve been performing well in,” said Kennerley, referring to lost inventory that impacts sales. “We can see the direct result of the AI tool that allows us to see much better inventory levels, sell-through on a by-store level.”
Moreover, he added that Kroger was working to transition away from only using this tool to address shrink and using it to identify sales opportunities as well — “primarily on seasonal items,” which he said could be managed more efficiently.
Looking ahead, Kennerley also highlighted an opportunity to “deepen customer engagement,” ultimately accelerating sales.
Kroger ranks No. 6 in Digital Commerce 360’s Top 2000 Database. The database ranks North America’s largest online retailers by their annual ecommerce sales. Kroger is No. 1 in the database’s Food & Beverage category. Digital Commerce 360 projects that Kroger online sales will reach $19.98 billion in 2025.
Kroger web sales by year
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