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03/08/2021

Kroger Soft Opens First Ocado Fulfillment Center in the U.S.

Jamie Grill-Goodman
Senior Editor
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Over two years in the making, The Kroger Co. has finally soft opened its first U.S. Ocado customer fulfillment center (CFC).

Kroger's announced in November 2018 that the first automated warehouse facility with digital and robotic capabilities, also known as a "shed,” would be constructed in Monroe, OH, a suburb north of Cincinnati. Kroger invested $55 million on the facility, which measures 335,000 square feet and is expected to generate more than 400 jobs. The retailer has said it plans to open 20 CFCs to support its seamless vision. 

Last week, Kroger completed the inaugural order through the first Ocado Shed, CEO Rodney McMullen said in the company’s earnings call.

“This marks the soft opening of the facility and we look forward to a grand opening in early April,” he said. “We continue to be excited about the elevated experience that this will bring to our customers in the Tri-State area and across the country as we continue to open additional facilities.”

Kroger’s overall digital sales grew 118% including delivery sales growth of 249% during its fourth quarter 2020. When customers engage in both Kroger’s stores and online the retailer sees a 98% retention rate within its ecosystem, highlighting how sticky its customer engagement is, McMullen noted.

“The scale of our digital business has grown rapidly,” he continued. Kroger had more than 1.3 billion digital customer interactions in 2020, a 30% increase over the prior year.

“Our significant reach allows us to meaningful personalize the customer experience,” he said, noting Kroger had more than half a trillion personalized recommendations for customers during 2020. 

The planned CFCs will help the grocer meet digital demand by introducing robotics technology, allowing for next-generation automated storage and retrieval.

"With Kroger we are developing a game-changing ecosystem for serving online grocery to customers across the United States,” Luke Jensen, CEO of Ocado Solutions, said in January. “This includes Ocado's automated CFCs across a range of sizes, as well as software to optimize fulfilment in stores for curbside pickup.”   

In addition to the Ohio warehouse, the grocery retailer and Ocado have announced plans to build CFCs in Phoenix, AZ; Romulus, MI; Groveland, FL; Fredericksburg, MD; Atlanta; Dallas; and Pleasant Prairie, WI, as well as sites planned for the Pacific Northwest and West regions.