Kroger fulfillment network expands to the greater Nashville region and Chicago metro area
Ohio-based retail giant Kroger is seeking to strengthen its position in grocery delivery.
The Kroger Co., Cincinnati, has announced it will offer more Americans delivery through the addition of spoke facilities in Nashville, Tenn., and Maywood, Ill.
Working in conjunction with nearby fulfillment centers, Kroger Delivery will now reach customers in Greater Nashville and the Chicago Metro Area, according to a news release.
"Kroger Delivery offers customers a truly differentiated service,” Bill Bennett, vice president and head of E-commerce for Kroger. “Orders are transported in refrigerated trucks and delivered by trained Kroger uniformed associates, giving customers an unparalleled white glove delivery experience.”
Local shoppers will also have access to the newly launched Boost by Kroger annual membership program, according to the release. For either $59 or $99 per year, Boost provides customers with benefits such as unlimited free delivery on orders of $35 or more and two fuel points for every $1 spent on groceries and general merchandise purchases through delivery, pickup and in-store shopping, the release said. Kroger estimates the membership can save customers more than $1,000 per year on fuel and grocery delivery.
The approximately 40,000-square-foot facility in Nashville will work in conjunction with the Atlanta fulfillment center, increasing the network's reach to customers up to 200 miles from the hub. The facility is located on Polk Avenue in Nashville, according to the release.
The nearly 80,000-square foot facility located in Maywood, Ill., is approximately 20 miles west of Chicago. It will work concurrently with the fulfillment center in Pleasant Prairie, Wis., and expects to employ more than 180 associates, according to the release.
The release said the expansion to Greater Nashville and the Chicago Metro Area represents an extension of a partnership between Kroger and Ocado Group, a world leader in technology for grocery e-commerce. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics and automation, according to the release.
The delivery network relies on highly automated fulfillment centers, the release said. At the hub sites, more than 1,000 bots whizz around giant 3D grids, orchestrated by proprietary air-traffic control systems. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.
As customers' orders near their delivery times, the bots retrieve products from The Hive and present them at pick-up stations for items to be sorted for delivery, a process governed by algorithms that ensure items are intelligently packed, according to the release. For example, fragile items are placed on top, bags are evenly weighted and each order is optimized to fit into the lowest number of bags, reducing plastic use.
After product orders are packed, groceries are loaded into a refrigerated delivery van, which can store up to 20 orders. Powerful machine-learning algorithms optimize delivery routes, considering factors such as road conditions and optimal fuel efficiency, the release said.
Vans may travel up to 90 miles with orders from the hub and spoke facilities to make deliveries. Associates at the spoke facility will deliver orders within their service area, adding ZIP codes as demand grows, according to the release.
Kroger currently operates customer fulfillment centers in Monroe, Ohio; Groveland, Fla.; Forest Park, Ga.; Pleasant Prairie, Wis.; and Dallas, Texas. The fulfillment network plans additional customer fulfillment centers in California; Frederick, Md.; Phoenix, Ariz.; Romulus, Mich.; Cleveland, Ohio; Charlotte, N.C.; and Aurora, Colo.; as well as South Florida and the Northeast.
Retail dominance
A national leader in grocery sales, Kroger is extra-dominant in Ohio. According to 2021 Shelby Market share numbers, Kroger enjoyed a 43% share of the market in the Ohio/West Virginia and Kentucky region that includes the cities of Cincinnati, Columbus, Dayton-Kettering, Springfield and Toledo, more than tripling the Walmart share of 12.3%.
In the Indiana/Ohio market that includes Bloomington and Fort Wayne, Ind., Kroger’s market share was reported at 25%, compared with 23% for Walmart and 21% for Meijer.
