Kroger in the US competes with Amazon and others in building robot logistics centers

Recently, Kroger, the largest supermarket chain in the United States, built a 35,000-square-meter logistics center in Monroe, Ohio, using Ocado robots to pick and deliver goods to improve its logistics delivery speed.

Kroger sales reach $132.5 billion in 2020

According to Kroger, the company is working hard to build logistics centers, and the cost of each logistics center has exceeded 50 million US dollars. It is reported that Kroger's robots were initially used only for delivery, but the service has now been expanded to automatic picking.

In this logistics center, an order containing 50 items can be sorted in less than 5 minutes, which is much faster than the manual picking speed of physical stores. It will continue to expand, covering large areas from Louisville to Indianapolis and Columbus, providing residents in these areas with same-day or next-day delivery services.

Kroger 's plan has been met with some skepticism because there are so many unknowns about the future. Even before the coronavirus pandemic, Kroger was losing market share to Walmart, Amazon, high-end regional supermarket chains and no-frills grocers.

As Americans cooked more at home, Kroger did attract more customers, with sales increasing 8.4% to $132.5 billion in the last fiscal year.

Digital sales surpass $10 billion

Kroger 's expansion into digital comes as its executive said it expects digital sales to double from $10 billion by 2023.

But industry insiders said that this would obviously bring challenges to Kroger's ambitious e-commerce plans, as Kroger must hire loaders and delivery truck drivers. The development of online business may also affect the profits between logistics centers and physical stores. This is undoubtedly a big bet in unknown territory.

Competitors including Walmart, Albertsons and Ahold Delhaize are taking a simpler approach, so-called “micro-fulfillment” centers that can be set up behind or near physical stores. Such facilities are cheaper to build, faster, closer to customers and could eventually replace many of the human pickers in supermarket aisles.

In general, Kroger's layout of logistics centers still needs time to test.

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