Depending on who you ask, Kroger is either making a fatal mistake or cementing his future online. The row is over how the largest traditional supermarket chain in the United States. Owner of Fred Mayer and the QFC- is switching to e-commerce.
Which has become more pressing during the pandemic as online grocery sales boom. The retailer is lagging behind in adopting the web capabilities. But under the pressure of Amazon’s accession to the class and Walmart’s massive investment, Kroger CEO Rodney McMullen is now overseeing a bold bet on robotics.
While, the key to McMullen’s plan appears at a 375,000-square-foot facility in Monroe, Ohio, about 30 miles north of Kroger’s headquarters in Cincinnati. Three floors above the warehouse floor there, dishwasher-sized robots spin over a network of paths so large that lines meet in the distance, like a scene from the science fiction movie Tron. Their mission: Retrieve grains, soda and 28,000 other items from 21 levels of stacked boxes and then transport these goods to humans who sort and deliver them to homes. A fulfillment facility can pick up a 50-item order in less than five minutes, which is much faster than a human worker fetching goods from the store. Opening this spring, it will serve an area stretching from Louisville, Kentucky, to Indianapolis and Columbus, Ohio, with a mixture of same-day and next-day service.
Here’s the official statement “Society has leaped into a new digital age, and so has Kroger,” said McMullen at an investor event last month, in which he pledged to double the company’s $ 10 billion digital sales by the end of 2023. In front of us. ” On Wednesday, McMullen held a call with reporters to discuss the opportunity. But the massive commitment to building these fulfillment centers, or “barns” – the first few costings more than $ 50 million each – has its doubts.
It is unclear to us whether the Ocado model can work profitably in the US markets,” said Moscow, who estimates that Kroger will take up to eight years to recover his investment – like most analysts – has a pending rating for his shares. Competitors including Walmart, Albertsons and Ahold Delhaize are taking a simpler approach, testing “partial fulfillment” centers. That can be conveniently placed in the back of the store or nearby. They are cheaper and faster to build, are located close to customers’ homes and could eventually replace the many human order collectors who are now blocking aisles in supermarkets across the country. Walmart, which currently employs only 170,000 people to select and fill out online orders, now plans to build 100 centers to fulfill small orders, with more potential in the future. Even smaller chains, like Asian food retailer H Mart, are now installing it.
Analysts said that fulfilling small orders is probably the most profitable way to handle online orders, while Simon Gottman of Morgan Stanley calls it “the future of grocery.” Of course McMullen disagrees, and during an interview with him on April 6, he refused even to speak out loud about competing technology. Now what are your thoughts? Let us know in the comment section below!