Kroger delivery coming to central Oklahoma by late 2022
Feb. 27—The nation's largest grocery retailer will be an option for Normanites by year's end with their new e-commerce delivery model.
Kroger Co. announced earlier this month they will enter the Oklahoma market with a spoke facility in late 2022 as part of a rapid expansion effort nationwide.
The fulfillment center, a 50,000-square-foot spoke facility, 8801 North I-35 Service Road in Oklahoma City, will collaborate with the new 350,000-square-foot hub in Dallas, Texas, according to a company release.
The system uses automated vans that can travel up to 90 miles from the hub and spoke facilities like the one planned for Oklahoma City to fulfill orders, the release states.
Delivery through the model is powered by UK-based Ocado Group. The tech company provides robotic solutions for online grocery around the world.
Kroger and Ocado formed a partnership in 2018 to introduce an automated system that is the first-of-its-kind in the U.S, according to Kroger's website.
Kroger's delivery service uses highly automated fulfillment centers like the one planned for Oklahoma City. Grocery orders at hub sites are expedited by more than 1,000 bots moving on a 3D grid called "The Hive."
An algorithm ensures items are strategically packed, such as breakable items on the top and even weight distribution.
The algorithms optimize delivery routes and factor in road conditions and fuel efficiency. Employees at the Oklahoma City fulfillment center can deliver orders within their service area, adding ZIP codes as demand increases.
Gabriel Arreaga, Kroger's senior vice president and chief supply chain officer, said the expansion is part of their strategy to double digital sales and profitability by the end of 2023.
The Regional Food Bank of Oklahoma said with the entry of Kroger into the market comes better access, which helps everyone, including nonprofits that use surplus food to give to those in need.
The RFBO connects to grocery partners to access fresh produce and other items deemed surplus, and Prickett said the prospect of partnering with the retailer is promising. Last year, the RFBO rescued 11.4 million pounds of food through the program and partnerships with Homeland, Walmart, Sam's Club, Target and Sprouts.
"It may not be as much as we typically get from a grocery store because there will be some efficiencies [with Kroger's system], but we anticipate receiving some," Prickett said.
Arreaga said the spoke facility was designed to provide a high level of customer service while improving access to fresh food.
Kroger CEO Rodney McMullen said their delivery service predicates a modern shift in consumer behavior. Oklahoma will follow the company's expansion into Florida with their no-store strategy in 2021.
While the facility will heavily rely on automation, it is expected to employ up to 191 full-time associates.
Oklahoma Governor Kevin Stitt said Kroger's entry into Oklahoma will highlight the state's distribution infrastructure.
"Kroger's new e-commerce model is innovative, creates new fresh grocery opportunities for the Greater Oklahoma City region, and paves the way for improving health and quality-of-life for Oklahomans," Stitt said in a statement.
Jeff Elkins covers business, living and community stories for The Transcript. Reach him at jelkins@normantranscript.com or @JeffElkins12 on Twitter.
