Kroger and Ocado plan Michigan CFC site

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 29 September 2020

Following an announcement earlier this summer, Kroger and Ocado have confirmed Romulus, MI as the location for a Customer Fulfillment Centre (CFC).

Supporting customers in Michigan, Northern Ohio, and Indiana

In June, Kroger announced that it would open new facilities in the Great Lakes, Pacific Northwest and West regions as part of its strategic partnership with Ocado. Confirming Romulus as the Great Lakes location, the facility will enable Kroger to support customers in Michigan, Northern Ohio, and Indiana. At 135,000 sq ft the CFC will be the smallest of the nine announced to date, highlighting the flexibility of the Ocado model. It is expected to open 18 months after the site breaks ground. Commenting on the plans, Robert Clark, Kroger's senior vice president of supply chain, manufacturing and sourcing, said,

"We continue to invest in and constantly improve our ecommerce capabilities, focusing on cost-effective solutions. Our partnership with Ocado is an essential part of our evolving seamless ecosystem. 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."

Source: IGD Research, Map Data © 2020 Google

Planned sites

  • Monroe, Ohio – this 335,000 sq ft facility will be located close to the retailer’s Cincinnati HQ and is set to become operational in early 2021 following a ground-breaking ceremony last summer. This is core Kroger territory
  • Groveland, Florida – this 375,000 sq ft site is expected to become operational in 2021. It is unique among the locations announced to date as the retailer does not operate any stores in Florida. Recently it divested its stake in Lucky’s Market, a natural and organic specialist that had expanded in the region with Kroger’s support
  • Forest Park, Georgia – 375,000 sq ft, expected to become operational in early 2022. Kroger has a strong physical presence in the region
  • Dallas, Texas – 350,000 sq ft, expected to become operational in early 2022. Kroger has a solid presence in Texas overall, but significantly stronger in Houston than Dallas
  • Pleasant Prairie, WI – 350,000 sq ft, expected to become operational in late 2022, core Kroger territory, driven by its acquisition of Roundy’s in 2015
  • Frederick, Maryland – 350,000 sq ft, expected to become operational in early 2023. The retailer has a strong presence in Washington and Baltimore through its Harris Teeter business, but no real presence in the Philadelphia market
  • Romulus, Michigan – 135,000 sq ft site, expected be operational in 2023 or earlier
  • Pacific Northwest – 200,00 sq ft site, potential to sited in Washington state and to be operational in 2023 or earlier
  • West – 300,00 sq ft site, potential to be sited in California and to be operational in 2023 or earlier

Source: Kroger

Pandemic-driven growth affirms Kroger’s bold plan

These sites form part of Kroger’s plans to develop up to 20 CFCs as part of its strategic partnership with Ocado. The recent boost to grocery ecommerce given by the coronavirus pandemic will have provided affirmation to the retailer’s plans, which have often been considered bold in scope and ambition. Developing this fulfillment model will be a key part of Kroger’s strategy to build a large, sustainable and profitable model for grocery ecommerce.

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