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First of Kroger’s CFCs ready to fulfill orders

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CINCINNATI — Kroger Co. last month announced that the first of 20 customer fulfillment centers (CFCs) it is developing in partnership with British online grocer Ocado Group PLC was ready to fulfill orders from online shoppers.

The gigantic warehouse, in Monroe, Ohio, north of Cincinnati, deploys robots, artificial intelligence and autonomous-navigation software to pick and pack merchandise and deliver it to customers.

Kroger is betting that the investment in machine learning will allow the company to satisfy shopper demand for rapid delivery without having to take on an army of humans to run the centers.

“It’s truly uplifting to reach this moment in Kroger’s history — better yet, grocery industry history — with our partners at Ocado,” Rodney McMullen, Kroger’s chairman and chief executive officer, said in a statement on April 14.

“The shed,” as the partners refer to the 375,000-square-foot warehouse, features some 1,000 robots alongside 400 humans. Merchandise will be delivered in temperature-controlled Kroger Delivery vans, capable of accommodating up to 20 orders and running on Ocado software and mapping algorithms to optimize deliveries along the fastest and most efficient routes.

Kroger and Ocado announced their partnership in 2018, with McMullen explaining that the investment would establish a seamless digital ecosystem that would go a long way toward helping Kroger realize the goals of its Restock Kroger program to redefine the grocery experience and create shareholder value.

The opening of the first CFC advances Kroger’s position as “one of America’s leading e-commerce companies,” McMullen remarked.

“The momentum we’re experiencing is well timed with the evolution of Kroger Delivery, underpinning the permanent shift in grocery consumer behavior and need for enterprising and modern e-commerce and last-mile solutions — today’s true competitive horsepower,” he said.

Kroger reported that its digital sales increased by 116% in 2020, with the retailer’s e-commerce business accounting for more than $10 billion in sales.

“This moment marks the next phase of our partnership, and it comes against the backdrop of soaring demand for online grocery options in the U.S. and worldwide,” said Tim Steiner, Ocado’s cofounder and CEO. “The breadth of this fulfillment ecosystem will be crucial in helping Kroger to continue to win in e-commerce across the United States.”


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