Ahold Delhaize USA to Build Philadelphia AutoStore Facility

Ahold Delhaize announced this morning it would open an automated e-commerce fulfillment center in Philadelphia with the capability to prepare 15,000 online delivery orders a week for customers of its Giant Direct business.

The new facility leverages the AutoStore microfulfillment technology through the logistics software company Swisslog, and will also use manual picking technologies of Ahold Delhaize’s Peapod Digital Labs, the company’s in-house e-commerce engine. It is part of an ongoing expansion of technologies meant to efficiently tackle online demand through a variety of means, such as traditional distribution centers; e-commerce fulfillment centers, including an ongoing evaluation of a Takeoff Technologies’ unit built inside of a Connecticut Stop & Shop store; and stores offering click-and-collect.

Additional microfulfillment pilots will be announced in the coming months, the company said.

The  124,000-square-foot Philadelphia facility, which Giant previously announced would be built in the city's Eastwick neighborhood, represents Ahold Delhaize’s first announced partnership with AutoStore, the Norwegian technology company that developed a grid storage system using robots for efficient speed storage and retrieval. AutoStore and Swisslog last year announced they were working with Texas retailer H-E-B, its first announced U.S. grocery deployment.

“Over the past year, all Ahold Delhaize USA companies have seen a tremendous increase in online sales growth, and we believe this growth is here to stay,” said JJ Fleeman, president of Peapod Digital Labs and Ahold Delhaize USA’s chief e-commerce officer. “As we think about shifting consumer expectations and the future of omnichannel shopping, we must continue to build and evolve our already strong infrastructure to optimize pickup and delivery. We’re excited to kick off this pilot with The Giant Co. and Swisslog as we continue to build out e-commerce fulfillment capabilities, which we believe will be key in supporting continued omnichannel growth.”

The hive robotic technology for the new EFC will include the AutoStore storage and retrieval system, empowered by Swisslog’s SynQ software and pick stations, as well as Peapod Digital Labs’ proprietary manual picking capabilities. Applying the advantages of the AutoStore grid storage density and goods-to-person productivity gains in tandem with Peapod Digital Labs’ picking system will create a flexible solution ideal for streamlining grocery e-commerce order fulfillment, Ahold Delhaize said.

“This pilot is an exciting milestone in The Giant Co.’s omnichannel evolution as we work to transform the online grocery experience for our customers,” said Nicholas Bertram, Giant’s president. “As we continue to see incredible demand for Giant Direct across the Philadelphia region, working with Swisslog to incorporate state-of-the-art technology like AutoStore will not only bolster our overall e-commerce platform for future growth but also significantly increase our operating capacity, allowing us to deliver a faster, best-in-class experience to more customers each week.”

Ahold Delhaize USA is in the process of a nearly $500 million project to modernize and unite its supply chain and self-distribute to all of its stores and shoppers.

“As we continue to transform the supply chain for the future, we’re doing so with the lens of creating a truly omnichannel supply chain, there for customers whenever, wherever, however they want to shop,” said Chris Lewis, EVP of supply chain for Retail Business Services, Ahold Delhaize USA’s services company. “By 2023, Ahold Delhaize USA companies will be serviced by one of the largest supply chains and private fleets on the East Coast. Continuing to explore ways to maximize the total infrastructure is critical as we create an omnichannel supply chain of the future.”