Kroger to add ‘spoke’ fulfillment site in northern Kentucky

The Kroger Co. plans to open a small “spoke” facility in Kentucky’s Boone County to support online grocery delivery fulfillment in the region.

Plans call for a 2,000-square-foot spoke to be built in an existing building and serve as a cross-docking site for Kroger’s 375,000-square-foot, Ocado-automated customer fulfillment center (CFC) in Monroe, Ohio, just north of Cincinnati. The more than $550,000 project, which will create 98 full-time jobs, was reported by Kentucky Gov. Andy Beshear.

No opening timetable was announced for the northern Kentucky spoke, but the ancillary facility would be Kroger’s smallest yet by far. The Cincinnati-based retailer already operates a 50,000-square-foot Kentucky spoke, in Louisville, that went live last August. That site also supports the Monroe CFC.

Currently, 13 Ocado-automated spokes, ranging from 40,000 to 80,000 square feet, are in operation. Kroger has said these larger spokes can handle additional online order capacity expand delivery service of the CFC “hubs” to up to 200 miles.

“We are thrilled to have our northern Kentucky spoke facility considered for the Kentucky Business Investment program (KBI) and extend our deepest gratitude to the Kentucky Economic Development Finance Authority (KEDFA) staff for their support,” Ben Hamilton, vice president of logistics and network strategy for Kroger Delivery, said in a statement. “We are passionate about delivering a fresh, convenient customer shopping experience. This expansion will mean lower prices and more choices for more people across Kentucky. Just like their in-store experience, customers will have access to personalized digital coupons, valuable fuel points and the fresh, high-quality products they need, want and love.”

Most recently, Kroger opened a 70,000-square-foot automated spoke in Austin, Texas, which supports a 350,000-square-foot CFC in Dallas that went operational in July 2022.

Besides the Austin and Louisville facilities, Kroger has spoke locations in San Antonio, Texas; Oklahoma City; Birmingham, Alabama; Nashville, Tennessee; Maywood, Illinois; Miami, Tampa, Jacksonville and Opa-Locka, Florida; Lockbourne, Ohio; and Indianapolis. The Oklahoma City spoke expanded Kroger’s market reach to 36 states, since the retailer has no physical stores in Oklahoma.

In Kentucky, Kroger operates 112 stores and employs more than 19,000 associates. The company also runs four manufacturing and distribution facilities in the state plus a regional headquarters in Louisville.

“Kentucky’s unique location and access to resources make our distribution and logistics sector one of the strongest in the country,” Beshear said in a statement. “We are continuing to see announcements in this sector that are bringing incredible opportunities and jobs to our communities across the state. I want to thank Kroger and their leadership for expanding their operations in Kentucky yet again and continuing to believe in what this state has to offer.”

In May 2018, Kroger unveiled an exclusive U.S. partnership with U.K.-based online grocery specialist Ocado Group to identify sites for about 20 automated CFCs over the ensuing three years. The high-tech CFCs use Ocado’s vertical integration, machine learning and robotics to fill e-grocery delivery orders and extend Kroger’s market coverage to a larger geographic footprint, including areas where it doesn’t operate brick-and-mortar stores.

So far, Kroger has announced 17 Ocado CFCs—ranging from 135,000 to 375,000 square feet—and eight are open. The 375,000-square-foot Monroe automated warehouse was the first CFC opened by Kroger, in April 2021. Another 375,000-square-foot CFC, in Groveland, Florida, that opened in June 2021 marked the first CFC in a state where Kroger doesn’t operate physical stores, except for one Harris Teeter location in Jacksonville.