Kroger, Ocado to Build in Phoenix

Kroger and Ocado will soon be building in Phoenix.

The retailer and its e-commerce technology partner jointly announced plans to construct a 223,000-square-foot robotic warehouse to support e-commerce for Kroger's Fry’s Food banner, which serves the greater Phoenix area.

Their statement—which follows approval of a development agreement and various financial incentives this week by the Phoenix City Council—confirms a previous announcement stating Kroger and Ocado would construct a customer fulfillment center (CFC) in the Southwest region.

Kroger and Ocado said the facility—for which they are still conducting research to determine a building location—represents an $89 million capital investment that will create 692 jobs expected to be phased in between fiscal year 2022-23 and 2025-26, with an average base salary of $44,000.

The facility is expected to be 222,850 square feet and open two years after ground is broken.

“Kroger continues to accelerate the expansion of our national network to redefine the customer experience,” Gabriel Arreaga, Kroger's chief supply chain officer, said in a statement. “Our partnership with Ocado is and will continue to be rooted in our ability to deliver a value-added customer-centric solution that brings fresh food to customers through our seamless ecosystem.”

“With Kroger, we are developing a game-changing ecosystem for serving online grocery to customers across the United States. This includes Ocado's automated CFCs across a range of sizes, as well as software to optimize fulfillment in-stores for curbside pickup,” added Luke Jensen, CEO of Ocado Solutions. “Powered by Ocado's state-of-the-art, proprietary technologies, this site will be crucial in bringing unrivaled online grocery experiences to homes across Arizona and wider geographies.”

According to the Phoenix council agenda, the development agreement between Kroger and the city call for Phoenix to provide $1,000 to Kroger for each net new employee earning an annual wage exceeding $44,000 in their second year of employment. If the jobs are not created in the specified timeline, the city would not be obligated to pay.