The Kroger Co., America's largest grocery retailer, recently announced the official opening of its newest Customer Fulfillment Center (CFC) in Dallas, Texas. Powered by the Ocado Group (LSE: OCDO), the CFC will leverage advanced robotics technology and creative solutions to redefine the customer experience for customers in the Dallas-Fort Worth area.
"Kroger's fast-growing seamless ecosystem takes the promise of zero compromise to the next level, with Kroger Delivery bringing the freshest food and quality ingredients to your own doorstep—when you want it, how you want it," said Bill Bennett, Kroger Vice President and Head of E-commerce. "Customers can use Kroger.com or the Kroger app to check the weekly circular, select personalized digital coupons, search products by dietary preference and ultimately place their delivery order, saving time and money."
The company collaborated with the City of Dallas, the Governor's Office of Economic Development and Tourism, local and regional workforce solutions offices and school districts for talent acquisition and development.
"Kroger's choice to establish a new Customer Fulfillment Center in Dallas is a testament to the state's exceptional business-climate and highly skilled workforce," said Governor Greg Abbott. "This new center is great news for the people of North Texas, offering the local community greater access to fresh, nutritious foods, and bringing good-paying jobs and economic opportunities to hardworking Texans in the area. I look forward to working alongside the company as we continue to keep Texas the best place to live, work, and raise a family."
"The opening of Kroger's new Customer Fulfillment Center is a major win for our city — and it represents a tremendous investment in southern Dallas," Mayor Eric Johnson said. "This means hundreds of jobs, it means more economic development, and it means greater access to fresh groceries for all of our residents, including those in our historically underserved and overlooked communities. Together, we are building a more vibrant and more equitable city."
Local shoppers also have access to the newly launched Boost by Kroger annual membership program. For either $59 or $99 per year, Boost provides customers with benefits like unlimited free delivery on orders of $35 or more and two Fuel Points for every $1 spent on groceries and general merchandise purchases through Delivery, Pickup and in-stores. Kroger estimates the membership can save customers more than $1,000 per year on fuel and grocery delivery.
"Today is a great day for District 8 and all of Dallas. The new state-of-the-art Kroger fulfillment center provides hundreds and hundreds of good-paying jobs to the Inland Port and they have already hired many of our neighbors in the community," District 8 City Council Member and Chair of the Economic Development Committee Tennell Atkins said. "The center means that more people can get fresh and healthy groceries delivered right to their door quickly. This is a true win-win project and I'm so glad to see the doors open."
The 350,000 square-foot customer fulfillment center has brought more than 500 new jobs to Dallas and the surrounding communities. The facility will also work in collaboration with spoke facilities located in Austin, San Antonio and Oklahoma City. Each spoke facility will serve as a last-mile cross-dock that will enable Kroger Delivery to expand its services to more customers.
Kroger Delivery Explained
This expansion represents an extension of a partnership between Kroger and Ocado, a world leader in technology for grocery e-commerce. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence and automation in a bold new way, bringing first-of-its-kind technology to America.
"Kroger and Ocado Group are building something truly unique in the American grocery landscape," said Luke Jensen, CEO of Ocado Solutions. "Our expanding fulfilment network is reaching more and more customers, bringing the benefits of our cutting-edge innovation to Kroger communities nationwide. Today's event marks the start of a service in Dallas that will bring a whole new standard of grocery experience to homes across Texas and beyond."
The delivery network relies on highly automated fulfillment centers. At the hub sites, more than 1,000 bots move around giant 3D grids, orchestrated by proprietary control systems. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders. As customers' orders near delivery times, bots retrieve products from The Hive and present them at pick stations for items to be sorted for delivery, a process governed by algorithms that ensure items are intelligently packed. For example, fragile items are placed on top, bags are evenly weighted and each order is optimized to fit into the lowest number of bags, reducing plastic use. Bags are also recyclable, reflecting Kroger's commitment to its Zero Hunger | Zero Waste commitment to rid its communities of hunger and waste.
Kroger's end-to-end cold solutions keep groceries fresh once loaded onto customized refrigerated delivery vans, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, considering factors like road conditions and optimal fuel efficiency. Drivers may travel up to 90 miles with orders from facilities to make deliveries.
Kroger currently operates customer fulfillment centers in Monroe, OH, Groveland, FL, Forest Park, GA (Atlanta), Pleasant Prairie, WI, Dallas, TX and Romulus, MI (Detroit), with additional customer fulfillment centers slated for California, Frederick, MD, Phoenix, AZ, Cleveland, OH, Charlotte, NC, Aurora, CO (Denver), as well as South Florida and the Northeast.