When Kroger announced a deal with Ocado in 2018 to build automated order fulfillment centers in the US, the grocery store predicted it would identify sites for a maximum of 20 installations within three years. However, as of this month, Kroger has started operations in just eight CFCs, and while the company has announced plans to build more robotic command centers, it hasn’t publicly revealed a timeline for those projects. . Grocer currently operates CFC in Monroe, Ohio; Groveland, Florida; Forest Park, Georgia; Pleasant Prairie, Wisconsin; Dallas; Romulus, Michigan; Aurora, Colo.; and Frederick, Maryland.
Kroger executives expressed optimism about the prospects for a return on the company’s multi-billion dollar investment in automation.
When asked about Kroger’s fourth-quarter earnings earlier this month and the pace of the rollout of the Ocado facilities, Gary Millerchip, Kroger’s chief financial officer, said the retailer was “now halfway through that journey.” Approximately 18 months into the first two installations, fully understand the magnitude of customer behavior demand and optimize this model.
Millerchip added in a call March 2 that even in terms of better understanding the economics of CFCs, Kroger “sees everything we could have hoped for in terms of customer retention.”
, however, McMullen noted on the conference call that identifying locations for future CFCs “proved a little more difficult than expected.”
Kroger said its online sales increased 12% in the last three months of 2022 compared to the same period in 2021.
speech to Bank of America Consumer & At a March 15 retail conference, McMullen said he believes Kroger’s online business could be at least as profitable as its physical store. McMullen said at the conference that he decided to go through with the Ocado deal because he believes in automation’s ability to power his technology.