As we all know that Kroger is always ahead in their strategies. Now, it’s betting on automated warehouses to catch up with online groceries, but critics warn it could be a costly mistake. Depending on who you ask, Kroger is either making a fatal mistake or cementing their future online.
Now, there’s debate about the disagreement which is over how the largest traditional store chain in the United States is navigating the shift 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 pressure from Amazon’s reach into that category and huge Walmart investment, Kroger CEO Rodney McMullen is now overseeing a bold robotics bet the company needs to get right.
Furthermore, the key to McMullen’s plan seems 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: to 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 the homes. Kroger uses a robotic army to counter Amazon and Walmart. 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 service on the same day and the following day. While, 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 enormous commitment to building these centers, or “barns” – each costing more than $ 50 million – is skeptical. The deal with British company Ocado Group Plc, which included increasing its stake in Kroger in the UK to more than 6%, about three years ago. Since then, Americans have shown a preference for receiving online orders from outside the store to avoid cumbersome home delivery fees. Initially, Kroger robots will be used for delivery only. There are also cheaper ways to automate grocery selection, like what Walmart and others are doing with smaller, robot-managed facilities linked to existing locations.
“This is a very big gamble in untested waters,” said Robert Moscow, an analyst at Credit Suisse. “I would have chosen a more flexible and less capital-intensive approach. There are a lot of unknowns out there.” Now, what are your thoughts on this? Let us know in the comment section below!