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Kroger’s Amazon Assault Powered by Robots

National  + Ohio  + Weekender  | 

The Kroger Company is in the process of building 20 automated warehouses around the U.S. in partnership with the U.K.’s leading online grocer, Ocado Group Plc. The British retailer’s focus since its beginning was creating a digital grocery shopping platform, complete with a tech-enabled warehouse and logistics system.

Ocado’s newest online grocery fulfillment center near London features 1,000 robots that traverse on a grid at 13 feet per second, and can pick up and transport bins of groceries. Not only is it cost-efficient, due to reduced labor costs, the system is time-efficient too. Workers can now pack roughly 600 items per hour, which Ocado’s estimates translates to one hour of labor savings for every 50-item order.

But, perhaps most compelling about Ocado’s system is the fact that all aspects of the fulfillment process are designed to accommodate grocery shopping’s unique quirks. The system can cue workers to place items in a single grocery bag at a specific time for any given order. That’s key when packing groceries because assembling orders involves a wide range of lighter weight and heavier goods, including packaged items, fresh produce, as well as chilled and frozen food.

Colliers International’s Anjee Solanki says “The American supermarket giant is counting on the combined expertise with its British partner to help it outdo rivals ranging from to Walmart.”

Kroger’s digital shopping strategy follows two related moves by the company, including the $200-million acquisition of Home Chef, a meal-kit company, and the disposition of its convenience store business unit to EG Group for $2.15 billion.

The U.S. grocer is counting on this acute specialization and partnership with Ocado to help it solve the challenges of online grocery shopping. The British company has already found success. Ocado reported its sales increased 12% last year to $2 billion (USD), and its active customer count increased 11% from the previous year.

Kroger plans to invest $55 million to build the first of the Ocado-powered fulfillment centers in the Cincinnati region. 

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Inside The Story

Read more at BloombergConnect With Colliers’ Solanki

About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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