Kroger to Build First Automated Fulfillment Center

Cincinnati is the first site for customer fulfillment center that will streamline grocery shopping experience.

November 27, 2018

CINCINNATI - Kroger has announced plans to construct a 335,000-square-foot automated fulfillment center in a Cincinnati, Ohio suburb. Known as a “shed,” the facility will be fueled by Ocado technology, create more than 400 new jobs and cost $55 million to build—featuring robotic and digital capabilities for food storage and retrieval.

Part of the grocer’s Restock Kroger vision, the first customer fulfillment center will be subject to securing state and local incentives. Kroger and Ocado announced their partnership earlier this year, but a master services agreement was signed in October to bring the project to fruition.

Cincinnati is one of four sites to be announced before the end of the year. But the plan is to open 20 across the U.S. to introduce robotic capabilities and technology to the grocery industry. Construction is said to take up to three to four years—a long time in the ever-evolving tech and e-commerce industries.

According to Grocery Dive, the new shed’s location is close to Kroger’s headquarters, which will utilize existing partnerships and generate wide-ranging support. This could result in broader awareness and a larger e-commerce adoption among customers. There also isn’t serious competition for automated fulfillment in the area.

It’s a different story nationally, though. Walmart has invested heavily in e-commerce sales, and delivery services like Shipt, Instacart and Amazon Prime are dominating in the space. If Kroger can continue to invest and build quickly, they will be a top competitor in the digital grocery landscape.