Kroger breaks ground on first Ocado warehouse

The Kroger Co. and online grocery partner Ocado today broke ground on the first of 20 automated warehouses they plan to open over the next two years.

Located in Monroe, Ohio, the 335,000-square-foot customer fulfillment center (CFC) — or “shed,” in Ocado speak — is slated to become operational by 2021. The $55 million facility will use digital and robotic technology to fulfill online grocery orders and is expected to create 400 jobs.

"Kroger is incredibly excited to reach this meaningful milestone in our Restock Kroger vision to serve America through food inspiration and uplift," Kroger Chairman and CEO Rodney McMullen said in a statement. "Our partnership with Ocado will introduce transformative e-commerce, fulfillment and logistics technology in the U.S. and bring customers fresher food faster than ever before, accelerating our ability to provide anything, anytime, anywhere."

Cincinnati-based Kroger and U.K. online grocer Ocado unveiled their three-year partnership in May 2018. The companies plan to replicate the CFC model across the United States to fulfill online orders from customers.

Two more Ocado warehouses have been announced for central Florida and the Mid-Atlantic. Kroger said in March that it expects to break ground for a 375,000-square-foot CFC in Groveland, Fla., later this year and have the facility up and running in 2021. The company hasn’t yet specified the location for the Mid-Atlantic Ocado warehouse.

Related:Kroger names Florida site for automated warehouse

"This is a historic moment for our partnership. With construction starting for Kroger's first customer fulfillment center in the Cincinnati region, we are now well on the way to a nationwide revolution in how Kroger customers experience ecommerce," stated Luke Jensen, CEO of Ocado Solutions.

"In a fast-developing landscape for grocery retail, Kroger's determination to continue delivering the best experience for its customers, online as in stores, is unparalleled,” Jensen added. “I am excited that we will shortly bring the world-class innovation of the Ocado Smart Platform to their operations, as well as create exciting opportunities for engineers and technologists across the country to work with Ocado's cutting-edge robotics and automation."

Kroger has named Minneapolis-based Ryan Companies US Inc. to design and build the shed. According to Todd Schell, senior vice president of industry at Ryan Companies, the design of the Ohio CFC will serve as a model for future projects.

“We are excited that Ryan will partner with Kroger to design and build this innovative and complex facility to support the company's accelerated growth in grocery e-commerce,” Schell commented.

Related:Kroger allies with UK online grocer Ocado

In fiscal 2018, digital sales surged 58% at Kroger. The supermarket giant said that, during the year, it expanded online grocery delivery and/or pickup service to 91% of households in its trade areas.