Kroger partnering with Ocado to build high-tech fulfillment centers

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At the warehouses, robots will help humans pack about 600 grocery items per hour

Kroger is teaming up with British online grocer Ocado Group to build as many as 20 automated grocery warehouses to help grocery retailer accelerate its e-commerce operation. 

The move coincides with a surge of consumer interest in online shopping. While only a small percentage of consumers currently do their grocery shopping online, interest in doing so is poised to grow over the next few years. 

Under its partnership with Ocado, Kroger is building fulfillment centers across the U.S. where robots will help human workers pack roughly 600 items per hour. The packing process will take into account the need for specific ordering in grocery bags to ensure, for example, that workers don’t accidentally break a fragile product like a carton of eggs. 

"We are actively creating a seamless digital experience for our customers,” Rodney McMullen, Kroger's chairman and CEO, said in a statement. “Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience – creating value for customers and shareholders alike."

Increasing e-commerce initiatives

Amazon and Walmart have also been accelerating their efforts to stay ahead of changing consumer preferences related to online grocery shopping.  Walmart is testing driverless cars for grocery delivery, and Amazon recently unveiled new warehouse robots. 

Earlier this year, Kroger announced that it had started working with electric vehicle startup Nuro to launch driverless grocery deliveries as a way of competing with Amazon.

"We are incredibly excited about the potential of our innovative partnership with Nuro to bring the future of grocery delivery to customers today," Yael Cosset, Kroger's chief digital officer, said in a statement.

Kroger's first automated warehouse with digital and robotic capabilities is being constructed in Monroe, Ohio. The next two sites have been selected in the Central Florida and Mid-Atlantic regions. The grocery chain says it intends to open up to 20 of the automated warehouses over the next five years.

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