Kroger reaches into Pennsylvania with new Ocado e-commerce center

The Kroger Co. plans to open another Ocado-automated customer fulfillment center (CFC) in Ohio, enabling the supermarket giant to serve consumers in Pennsylvania — where it has no physical stores — via online grocery service.

Though not specifying the facility’s location, Kroger said Thursday the 270,000-square-foot, “Cleveland region” CFC will serve areas in northeastern Ohio and Pennsylvania, with the latter representing the retailer’s 37th state. The automated warehouse, which will create 400 jobs, is expected to go into operation 24 months after the project’s ground-breaking.

Cincinnati-based Kroger’s first Ocado facility, a 375,000-square-foot CFC in Monroe, Ohio, opened last April.

“Kroger is incredibly excited to expand our delivery business in our home state and provide northeast Ohioans access to thousands of fresh and popular products, including our industry-leading Private Selection and Simple Truth brands, through our customer fulfillment center,” Gabriel Arreaga, senior vice president and chief supply chain officer at Kroger, said in a statement. “The Cleveland region facility is an accelerant to our strategy to achieve the doubling of our digital sales and profitability rate by the end of 2023, and we’re eager to provide a rewarding experience for our new customers in northeastern Ohio and Pennsylvania and create new jobs for individuals passionate about technology, engineering, operations, logistics and transportation, inventory and quality management, and customer service and engagement.”

Related:Kroger to enter Oklahoma via Ocado e-commerce ‘spoke’

Kroger's partnership with Ocado is enabling the U.S. supermarket giant to use online grocery delivery to enter new market areas without having to open brick-and-mortar stores.

Thus far, Kroger has announced 17 CFCs, with three — including the Monroe facility — now fully operational. A 375,000-square-foot CFC in Forest Park, Ga., opened in early February, following the launch of another 375,000-square-foot CFC in Groveland, Fla., that went live in June in a state where Kroger doesn’t have physical stores. In December, Kroger also said it aims to build a 200,000-square-foot CFC in North Carolina.

The other Ocado CFCs reported by Kroger run from 135,000 to 375,000 square feet and include locations in Dallas; Frederick, Md.; Phoenix; Pleasant Prairie, Wis.; and Romulus, Mich., as well as unspecified sites in the Pacific Northwest, West and Northeast, the latter representing another location where Kroger lacks stores. The retailer also has announced plans for two CFCs in Southern California and two more in Florida.

“We are excited to bring Kroger and Ocado’s second automated warehouse to Ohio. As this site develops and goes live, it will be instrumental in delivering fantastic grocery experiences and exciting job opportunities to households across Cleveland, Pennsylvania and beyond,” commented Luke Jensen, CEO of Ocado Solutions, which has its U.S. headquarters in Tyson, Va. “Today’s announcement marks another milestone to developing Kroger’s seamless fulfillment ecosystem across the United States. 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 in grocery delivery.”

Related:Kroger goes live with Ocado automated warehouse in Atlanta

In addition, Kroger has launched three “spoke” supporting facilities with Ocado technology — in Indianapolis and in Tampa and Jacksonville, Fla. — and plans two more in Louisville, Ky., and Oklahoma City. The latter spoke site was announced last month and will bring Kroger into its 36th state, Oklahoma.

Kroger announced its partnership with United Kingdom-based Ocado Group in May 2018, at which time the companies said they planned 20 CFCs in the United States over the next three years. The Ocado CFCs and supporting facilities use vertical integration, machine learning and robotics to service online grocery orders and are expected to expand Kroger’s reach to a larger geographic footprint, including in areas where it doesn’t operate brick-and-mortar stores.