CINCINNATI — Kroger Co. last month opened its latest fulfillment “spoke” in Austin, Texas, allowing the grocery retailer to expand the reach of a customer fulfillment center (CFC) already operating in the Dallas area and powered by technology from U.K.-based Ocado Group PLC.
“Austin is one of the fastest-growing cities in the country, and we are thrilled to connect more customers to the Kroger Delivery shopping experience, which brings thousands of digital coupons, valuable fuel points and the freshest products directly to customers’ doors,” said Rebekah Manis, senior director of Kroger fulfillment centers.
Kroger and Ocado began collaborating in 2018 to establish delivery capabilities that combine artificial intelligence, robotics and automation in a hub-and-spoke delivery network.
The new 70,121-square-foot spoke facility in Austin works in conjunction with the Dallas fulfillment center, where customer orders are picked by associates who assemble orders and place them in climate-controlled vehicles to travel to Austin. Once the orders arrive at the spoke they are checked and loaded into a refrigerated delivery van, which can accommodate up to 20 orders. Machine-learning algorithms optimize delivery routes, gauging such factors as road conditions and maximal fuel efficiency, according to Kroger. Vans travel up to 90 minutes with orders from the hub and spoke facilities to make deliveries.
Kroger noted that the Austin hub is located in a district of Texas’ capital city designated by the Department of Agriculture as a “food desert,” where residents have limited options for securing affordable and healthy food.
The partners’ opened their newest fulfillment center last month in Aurora, Colo., a facility that allows for expansion of Kroger Delivery services to shoppers at King Soopers and City Market stores in Colorado.
“Aurora wholeheartedly welcomes Kroger,” said Mike Coffman, the city’s mayor. “Kroger’s facility will serve as a critical food distribution hub and may attract more fresh food options, such as urban farms and greenhouses that work with Kroger.”
Each network relies on highly automated fulfillment centers, Kroger said. “At the hub sites, more than 1,000 bots whizz around giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.”
“We are now live with eight CFCs around the U.S. supporting Kroger Delivery to reach customers across 14 states,” said Mark Bentley, president of the Americas for Ocado Solutions. “As we continue to expand this network nationwide, we’re introducing a step change in online grocery experience for Kroger shoppers, powered by some of the most sophisticated technology applied to any sector of the global economy.”
At the time the partnership was announced, Kroger and Ocado expected to build 20 CFCs. Another eight are in the works.
Tim Steiner, Ocado’s chief executive officer, told reporters in London last month that the pace of the rollout hinges on online grocery’s share of the overall market. Digital sales spiked during the pandemic, but the growth rate has cooled in recent months.
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