NEWS IN BRIEF

The next two Ocado-powered fulfillment centers for Kroger will be in central Florida and the Mid-Atlantic

By Mary Ellen Shoup contact

- Last updated on GMT

'CFCs will play a crucial role in helping Kroger offer its customers a superior online shopping experience,' says Ocado Solutions CEO, Luke Jensen.
'CFCs will play a crucial role in helping Kroger offer its customers a superior online shopping experience,' says Ocado Solutions CEO, Luke Jensen.

Related tags: Kroger, Ocado, ecommerce

Kroger and UK-based online grocery retailer Ocado will construct two new customer fulfillment centers (CFCs) in central Florida and the Mid-Atlantic, expanding the national grocery chain's online delivery reach throughout the East Coast.

Kroger and Ocado announced a partnership in May 2018 to open 20 automated fulfillment centers across the US and said in November that the first CFC would be located in Monroe, Ohio.

However, it has not specified a timetable for construction of the CFCs.

Ocado’s Smart Platform will allow Kroger to fulfill online orders from vast warehouses using digital and robotic technologies. Other e-commerce strategies employed by grocery retailers include an online personal shopper model (such as Instacart) where customers place their grocery orders directly with the store through a third party platform. While taking off in popularity, the model is reliant on whatever that particular retailer has in stock that day or week.

Kantar Consulting VP of retail and shopper insights Diana Sheehan previously told FoodNavigator-USA​ that Kroger leveraging “Ocado’s current logistics and technical expertise in supporting online grocery fulfillment in Europe allows Kroger to potentially leapfrog both Walmart and Amazon in this space.”

She added: “This model - a pure-play retailer using its platform as service support - was very successful for Amazon a decade ago, and could potentially be a similar game-changer for Kroger​​. The exclusivity of Kroger’s offer​​ is unique because it keeps that technology out of competitors’ hands trying to get up to speed in the online grocery landscape in the US​​.

“Not only does the knowledge make Kroger better positioned to succeed in ecommerce, but Ocado has also illustrated the ability to operate profitably in the ecommerce space, something yet to be realized in the US across any major grocery retailer."​​

The CFC model will be replicated to serve customers across America, according to Alex Tosolini, Kroger's senior vice president of new business development. 

"Kroger is developing the retail model of the future,"​ Tosolini commented. "We will co-innovate with Ocado to develop the best possible experiences for our customers, leveraging advanced robotics technology and creative solutions."

Luke Jensen, CEO of Ocado Solutions added: "As the US 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."

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THE KROGER CO/ SHAREHOLDER

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