Kroger names Michigan site for new Ocado online grocery facility

The Kroger Co. has identified Romulus, Mich., as one of the latest sites for nine planned Ocado-powered automated warehouses to fulfill online grocery orders.

Kroger said Monday that the 135,000-square-foot customer fulfillment center (CFC), to be located at 15675 Wahrman Rd. in Romulus, is expected to go into operation 18 months after ground is broken for the project. Kroger didn’t disclose the time frame for the ground-breaking. The facility will support customers in several market areas, including in Michigan, northern Ohio and Indiana.

In June, Cincinnati-based Kroger unveiled plans to build three new Ocado CFCs in the Great Lakes, Pacific Northwest and West. The Romulus CFC is the facility slated for the Great Lakes region. Thus far, Kroger hasn’t specified the other two sites.

“Kroger is incredibly excited to develop one of our industry-leading customer fulfillment centers in Michigan in relationship with Ocado to bring fresh food to our customers faster than ever before,” Robert Clark, senior vice president of supply chain, manufacturing and sourcing at Kroger, said in a statement. “We continue to invest in and constantly improve our e-commerce capabilities, focusing on cost-effective solutions. Our partnership with Ocado is an essential part of our evolving seamless ecosystem.”

Related:Kroger plans three more Ocado automated warehouses

Plans call for Kroger’s first Ocado CFC to open in Monroe, Ohio, in early 2021. Compared with the previously announced CFCs, which are around 350,000 square feet, the latest facilities will be smaller. Kroger said the CFCs will measure approximately 300,000 square feet in the West and 200,000 square feet in the Pacific Northwest. The Great Lakes facility originally was announced at about 150,000 square feet.

“In Michigan, we are engineering a smaller model for the region, leveraging advanced robotics technology and creative solutions to redefine the customer experience and respond to the growing demand for grocery e-commerce services,” according to Clark.

The Ocado CFCs use automation and artificial intelligence to service e-grocery orders. When announcing their partnership in May 2018, Kroger and United Kingdom-based Ocado said they plan to open 20s CFCs in the United States over the next three years.

Kroger and Ocado noted that they’re creating a flexible distribution network to serve various markets. To that end, the companies are combining disaggregated demand and store proximity with CFCs that vary in design and size. The Romulus facility is the smallest announced to date.

“Grocery e-commerce has reached an inflection point in 2020, and with Kroger we are developing a game-changing ecosystem for serving online grocery across the United States,” stated Luke Jensen, CEO of Ocado Solutions, which has its U.S. headquarters in Tyson, Va. “Powered by Ocado’s state-of-the-art technology, this site illustrates the unique flexibility of Ocado’s technology, as we are able to deploy sites of different sizes in different regions to maximize penetration across diverse markets. Ocado’s proven technology will allow Kroger to achieve the lowest cost-to-serve in the market, combined with the best freshness, accuracy and service.”

Related:Kroger to launch digital marketplace this fall

Other Ocado CFC locations announced by Kroger include Frederick, Md. (350,000 square feet); Pleasant Prairie, Wis. (350,000 square feet); Groveland, Fla. (375,000 square feet); Forest Park, Ga. (375,000 square feet); and Dallas (350,000 square feet). The Monroe CFC, which broke ground in June 2019, will be 335,000 square feet.

Kroger hasn’t specified opening timetables for the Romulus, West and Pacific Northwest CFCs or the Frederick facility. The Monroe, Groveland and Forest Park CFCs are expected to be up and running in 2021, and the Dallas and Pleasant Prairie facilities are slated to become operational in 2022.

The Romulus Ocado CFC is expected to bring 250 new jobs for the city of Romulus/Aerotropolis region.

“Kroger’s decision to invest $95 million and create 250 new jobs in Romulus further demonstrates that Wayne County is a global leader in logistics and fulfillment industries,” Wayne County Chief Executive Warren Evans said in a statement. “Kroger’s continued commitment to our region with the innovative new grocery delivery service provided by this high-tech facility will help improve access to fresh foods in southeast Michigan at a time when this service is more important than ever to keep residents safe and healthy.”