Kroger plans another two Ocado ‘spoke’ sites

The Kroger Co. is adding a pair of Ocado-automated “spoke” e-commerce fulfillment facilities in Tennessee and Illinois to help process online grocery orders.

Cincinnati-based Kroger said Thursday a 40,000-square-foot spoke on Polk Avenue in Nashville, Tenn., will work with its 375,000-square-foot, Ocado-powered customer fulfillment center (CFC) in Forest Park, Ga., increasing the Kroger Delivery network’s reach in the greater Nashville area to customers up to 200 miles from the CFC hub, which opened this past February.  

A bigger spoke site in Maywood, Ill., sized at nearly 80,000 square feet, will support Kroger’s Ocado CFC in Pleasant Prairie, Wis., an approximately 340,000-square-foot facility that went live in late June. The new spoke will enable Kroger Delivery to reach customers in the Chicago metropolitan area.

Including the Nashville and Maywood locations, Kroger and Ocado so far have announced 12 spoke sites, which serve as last-mile, cross-dock sites to enlarge the service radius of CFCs. Five spokes are now live — in Miami, Tampa and Jacksonville, Fla.; Lockbourne, Ohio; and in Indianapolis — and another five are planned for Louisville, Ky.; Oklahoma City; and Austin and San Antonio, Texas, and Birmingham, Ala. Kroger didn’t give an opening time frame for the new spokes in Tennessee and Illinois.

Related:Kroger opens Ocado-powered warehouse in Wisconsin

“Kroger Delivery offers customers a truly differentiated service. Orders are transported in refrigerated trucks and delivered by trained Kroger uniformed associates, giving customers an unparalleled white glove delivery experience,” Bill Bennett, vice president and head of e-commerce at Kroger, said in a statement. “Kroger Delivery is part of our rapidly expanding seamless ecosystem that provides customers with fresh and quality products when and where they want it, all with zero compromise and at an incredible value.”

When unveiling their partnership in May 2018, Kroger and United Kingdom-based Ocado Group said they planned to open 20 CFCs in the United States over the ensuing three years. The Ocado CFCs and supporting facilities use vertical integration, machine learning and robotics to service online grocery orders and are expected to extend Kroger’s reach to a larger geographic footprint, including areas where it doesn’t operate brick-and-mortar stores.

To date, Kroger has announced 17 Ocado-driven CFCs, with five now operational. Besides the Forest Park and Pleasant Prairie locations, they include a CFC in Monroe, Ohio — Kroger's first Ocado facility — that went live in April 2021; a 375,000-square-foot CFC that opened in Groveland, Fla., last June; and a 350,000-square-foot CFC that launched in Dallas this spring. In early March, Kroger said it plans to construct a 270,000-square-foot, “Cleveland region” CFC that will serve areas in northeastern Ohio and Pennsylvania, with the latter representing the grocer’s 37th state. And then last month, a nearly 300,000-square-foot CFC was announced for Aurora, Colo.

Related:Kroger kicks off grocery delivery in South Florida

Other Ocado CFCs reported by Kroger run from 135,000 to 375,000 square feet and include locations in Frederick, Md.; Phoenix; and Romulus, Mich., as well as Charlotte, N.C., the Pacific Northwest; and the Northeast, the latter representing another location where Kroger lacks stores, along with Pennsylvania and Florida (save for a Harris Teeter store in the Jacksonville area). The retailer also has announced plans for two CFCs in Southern California and two more in Florida.

Among its efforts to drive use of its online grocery shopping, delivery and pickup services, Kroger yesterday said it has rolled out its Boost by Kroger online benefits program nationwide. Boost is offered in two membership tiers, priced at $59 or $99 annually. All members get free delivery for online orders of $35 or more and double fuel points (up to $1 off per gallon of gasoline) for each dollar spent on groceries and general merchandise. The $59 annual membership provides delivery within 24 hours, while the $99-per-year option offers delivery in as soon as two hours. Kroger estimated that a Boost membership can save customers more than $1,000 per year on fuel and grocery delivery.