Grocer Kroger continues its rapid expansion of online grocery options, announcing it is expanding its distribution network to three new cities this year.
Speaking at a business update meeting in Orlando, Florida on Friday, Kroger officials said the company will open distribution centers in Austin and San Antonio, Texas, and Birmingham, Texas. Alabama. Similar to its previous Florida expansion, the (NYSE: KR) fulfillment centers will handle e-commerce grocery without a physical store nearby.
The Ocado Group (LSE: OCDO) will provide the technology inside the facilities.
“Kroger is very different today than it was in 1883 when we opened our first store. But the fundamental principles that made this store so successful – service, selection, value and our commitment to our customers – remain. the foundation of our business,” Rodney McMullen, Kroger president and CEO, said in a statement.
Kroger has distribution centers in Monroe, Ohio; Groveland, Florida; and Forest Park, Georgia. Additional centers are planned for California; Frederick, Maryland; Phoenix; Pleasant Prairie, Wisconsin; and Romulus, Michigan. Additional facilities will be planned in South Florida as well as the Northeast and West. In total, Kroger plans to open 17 new fulfillment centers over the next 24 months.
“I’m incredibly excited for the future of Kroger, and thriving brick-and-mortar stores and digital solutions are part of that,” Mullen added. “We continue to be excited about the momentum we are seeing with Kroger Delivery and our partnership with Ocado, helping Kroger strategically leverage our unique assets to expand into existing regions including Atlanta, Cincinnati and Dallas, as well as to enter new geographies such as Austin, Birmingham, Cleveland, Oklahoma City, OrlandoSan Antonio, South Floridaand the Northeast through a flexible network of high-tech facilities of varying sizes operated by friendly, knowledgeable associates.
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The new Kroger fulfillment centers, which range from 50,000 square feet to 70,000 square feet, will feature automation and more than 1,000 robots navigating 3D grids known as The Hive. Each hive includes bins and products for customer orders. As the customer’s delivery time approaches, the bot picks up the bins and moves them to pick stations to be sorted for delivery.
Refrigerated delivery vans make deliveries within a 90-mile radius. Each van can store up to 20 orders.
On March 3, Kroger reported digital sales increased by 105% in two years.
The company has been heavily involved in securing its future, investing heavily and testing new technologies, including drone delivery and autonomous delivery vehicles.
the drone serviceprovided by drone-expressa division of Telegrid Technologies, transports items up to 5 pounds from the Kroger store located at the Centerville Kroger Marketplace in Centerville, Ohio.
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In January, Kroger announced an expanded partnership with Noro, which makes autonomous delivery vehicles. This partnership includes a third-generation Nuro vehicle making deliveries in the Houston area. Kroger and Nuro first tested self-driving deliveries in 2018.
“Our expanded collaboration with Nuro supports Kroger’s commitment to providing fresh food, at great value, all without asking our customers to compromise,” said Yael Cosset, Senior Vice President and Managing Director information from Kroger. “The role of autonomous vehicles in our ongoing ecosystem continues to grow, helping to meet our customers in the context of their day without compromising quality or value, while contributing to our long-term growth and sustainability goals.
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