CINCINNATI — The Kroger Co. (NYSE: KR), America’s largest grocery retailer, and Ocado (LSE: OCDO), one of the world’s largest dedicated online grocery retailers, today announced Central Florida and Mid-Atlantic as the newly-named regions for America’s next two customer fulfillment centers (CFC).
“Kroger is excited to partner with Ocado—one of the most innovative, advanced companies in the world—to redefine the grocery shopping experience for customers along the East Coast,” said Rodney McMullen, Kroger’s chairman and CEO. “We are incredibly excited to introduce customer fulfillment centers in this region to deliver on our Restock Kroger vision to serve America through food inspiration and uplift.”
Kroger has committed to building 20 CFCs, powered by Ocado, to accelerate its ability to provide customers with anything, anytime and anywhere. The CFC model – an automated warehouse facility with digital and robotic capabilities, also known as a “shed” – will be replicated to serve customers across America. In November 2018, Kroger announced its first CFC will be constructed in Monroe, OH, a suburb north of Cincinnati.
“Kroger is developing the retail model of the future through our exciting partnership with Ocado, a UK-based company with global ties,” said Alex Tosolini, Kroger’s senior vice president of new business development. “We will co-innovate with Ocado to develop the best possible experiences for our customers, leveraging advanced robotics technology and creative solutions.”
“This announcement marks another important step toward combining Kroger’s long-standing dedication to innovative and world-class grocery services with Ocado’s unique, industry-leading technology,” said Luke Jensen, CEO of Ocado Solutions. “As the U.S. retail landscape continues to change, these CFCs will play a crucial role in helping Kroger offer its customers a superior online shopping experience in these two major markets.”
To view video and photography of a CFC, visit here.
At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: to Feed the Human Spirit™. We are nearly half a million associates who serve nine million customers daily through a seamless digital shopping experience and 2,800 retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.
Ocado is a UK based company admitted to trading on the London Stock Exchange (Ticker OCDO). It comprises one of the world’s largest dedicated online grocery retailers, operating its own grocery and general merchandise retail businesses under Ocado.com and other specialist shop banners, together with its Solutions division.
About Ocado Solutions
Ocado Solutions is responsible for corporate partnering, which began with its agreement to operate the online business of Wm Morrison Supermarkets plc in the UK, and more recently with agreements with Groupe Casino, Sobeys and ICA Group to develop their online businesses in France, Canada and Sweden respectively. The agreement with Kroger to provide it with the OSP suite of products to massively expand its online grocery business in the USA is Ocado Solutions’ largest and most recent partnership transaction.
OSP is an enabling platform provided as a service to retailers. It comprises access to Ocado’s physical infrastructure solutions to run highly efficient warehouse operations for the single pick of products, together with the entire end-to-end proprietary software applications required to operate an online grocery business – from user interfaces, through warehouse operating and control systems, to logistics, route planning and optimization. It is underpinned by Ocado’s expertise and experience as a dedicated online grocery operator in the UK.
OSP provides multiple advantages to retailers wishing to operate online including:
- enables retailers to own, control and operate their own online businesses
- based on proven systems and infrastructure which Ocado uses in its own retail business
- both modular (size flexible) and scalable (can start smaller and scale up on short lead times), and supports a large range
- significant operational cost benefits
- entire seamless proprietary software provision updated alongside Ocado’s own development program, providing “best in class” service for customers
- flexible agreement terms with low entry cost and ongoing fees linked to installed capacity
- Ocado does not compete with grocery retailers outside of the UK