Diginomica reports that Ocado’s relationship with Kroger has “run into some bumps in the road as the US firm puts the development of new Ocado automated Customer Fulfilment Centers (CFCs) on hold until such time as it is confident that ones that have already been opened are meeting expectations.”
According to the story, “Kroger and Ocado opened the first US CFC in Ohio back in 2021, followed by seven others, the latest going live as recently as June this year in Maryland. When the two firms announced their relationship back in 2018, the intention was to build out a national fleet of centers, but that now seems to be put on hold for the time being.”
Kroger CEO Rodney McMullen says that “right now, all the energy is focused on the ones we have and making sure that those are where we want them to be, where they need to be and on a sustainable basis…I would say that a ton of work is being done. We’re making progress, but we wouldn’t be [at] the point where we would start focusing on additional sheds until we make sure that we have a clear path on the ones we have.”
KC’s View:
Another reason to hit pause on new warehouses is the proposed acquisition of Albertsons, which no doubt will create new opportunities as well as present new stresses on the system. No reason to think that Kroger’s enthusiasm and commitment have been dimmed in any way, but this would be a good time to step back and reconnoiter.
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