CINCINNATI — The Kroger Co. (NYSE: KR), America’s largest grocery retailer, today announced the official opening of two new spoke facilities in Greater Nashville and the Chicago Metro Area. Serving as last-mile cross-dock locations, the new spokes will operate as a seamless extension of regional fulfillment centers, making Kroger Delivery available to more customers in Tennessee and Illinois.
“Kroger Delivery promises an unparalleled shopping and delivery experience, making fresh just one click away at Kroger.com or the Kroger app,” said Bill Bennett, Kroger Vice President and Head of E-commerce. “From personalized digital offers to our white glove delivery service, the Kroger seamless ecosystem saves time and money. Kroger Delivery orders are brought to customers in our branded delivery trucks and delivered to their doorstep by our trained and uniformed associates—all with zero compromise.”
Local shoppers also have access to the newly launched Boost by Kroger annual membership program. For either $59 or $99 per year, Boost provides customers with benefits like unlimited free delivery on orders of $35 or more and two Fuel Points for every $1 spent on groceries and general merchandise purchases through Delivery, Pickup and in-stores. Kroger estimates the membership can save customers more than $1,000 per year on fuel and grocery delivery.
The approximately 40,000-square-foot facility will work in conjunction with the Atlanta fulfillment center, increasing the network’s reach to customers up to 200 miles from the hub. The facility is located on Polk Avenue in Nashville, Tennessee and will employ more than 180 associates.
“Tennessee is defined by the brands that call our state home, so we are proud to partner with the Kroger Delivery team as the company establishes and opens its operations in Davidson County. Nashville’s pro-business climate and central location will be vital in helping Kroger expand its customer delivery reach across the Southeast for years to come,” said Stuart McWhorter, Tennessee Economic & Community Development Commissioner.
Maywood, Illinois (Chicago)
Located approximately 20 miles west of Chicago in Maywood, Illinois, the nearly 80,000-square-foot facility will work concurrently with the fulfillment center in Pleasant Prairie, Wisconsin. The site expects to employ more than 180 associates. “Kroger facility replaces a blighted area while adding new jobs and revenues that aid in the revitalization of our community. We are happy to welcome a partner that works to address our food desert designation and look to evolving collaboration with them,” said Maywood Mayor, Nathaniel George Booker.
Kroger Delivery Explained
The expansion in Greater Nashville and the Chicago Metro Area represents an extension of a partnership between Kroger and Ocado Group, a world leader in technology for grocery e-commerce. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics, and automation in a bold new way, bringing first-of-its-kind technology to America.
The delivery network relies on highly automated fulfillment centers. At the hub sites, more than 1,000 bots move around giant 3D grids, orchestrated by proprietary control systems. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders. As customers’ orders near delivery times, bots retrieve products from The Hive and present them at pick stations for items to be sorted for delivery, a process governed by algorithms that ensure items are intelligently packed. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the lowest number of bags, reducing plastic use. Bags are also recyclable, reflecting Kroger’s commitment to its Zero Hunger | Zero Waste commitment to rid its communities of hunger and waste.
“The continued expansion of the Kroger fulfillment network means improved access to fresh food for customers eager for the variety and value offered by Kroger that once could only be accessed through our stores,” said Gabriel Arreaga, Kroger’s Senior Vice President and Chief Supply Chain Officer. “This 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.”
Kroger’s end-to-end cold solutions keep groceries fresh once loaded into customized refrigerated delivery van, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, considering factors such as road conditions and optimal fuel efficiency. Vans may travel up to 90 miles with orders from the hub and spoke facilities to make deliveries. Associates at the spoke facility will deliver orders within their service area, adding ZIP codes as demand grows.
Kroger currently operates customer fulfillment centers in Monroe, OH, Groveland, FL, Forest Park, GA (Atlanta), Pleasant Prairie, WI, Dallas, TX and Romulus, MI (Detroit), with additional customer fulfillment centers slated for California, Frederick, MD, Phoenix, AZ, Cleveland, OH, Charlotte, NC, Aurora, CO (Denver), as well as South Florida and the Northeast.
At The Kroger Co. (NYSE: KR), we are Fresh for Everyone™ and dedicated to our Purpose: To Feed the Human Spirit®. We are, across our family of companies, nearly half a million associates who serve over 11 million customers daily through a seamless shopping experience under a variety of banner names. We are committed to creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.
About Ocado Group
Ocado Group is a UK based technology company admitted to trading on the London Stock Exchange (Ticker OCDO). It provides end-to-end online grocery fulfillment solutions to some of the world’s largest grocery retailers and holds a 50% share of Ocado Retail Ltd in the UK in a Joint Venture with Marks & Spencer. Ocado has spent two decades innovating for grocery online, investing in a wide technology estate that includes robotics, AI & machine learning, simulation, forecasting, and edge intelligence.