The Kroger Co. is adding a spoke facility in Oklahoma City, Oklahoma, powered by the Ocado Group.
"We're excited to extend the Kroger fulfillment network to Oklahoma City, a new geography for our operation and an integral part of our strategy to achieve the doubling of our digital sales and profitability rate by the end of 2023," said Gabriel Arreaga, Kroger's senior vice president and chief supply chain officer, in a statement. "This grocery delivery service is an innovative addition to the expanding digital shopping experience available to our customers. The spoke facility will provide unmatched customer service and improve direct access to fresh food in areas eager for the variety and value offered by Kroger."
The 50,000-square-foot facility will collaborate with the hub in Dallas, Texas, serving as a last-mile cross-dock location that expands Kroger's grocery delivery services and extends its reach to customers up to 200 miles from the hub. The facility is expected to become operational later this year and will employ up to 191 full-time associates.
The expansion in Oklahoma City represents an extension of a partnership between Kroger and Ocado, a world leader in technology for grocery ecommerce. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics, and automation in a bold new way, bringing first-of-its-kind technology to America.
Kroger Chairman and CEO Rodney McMullen said in a statement that Kroger Delivery "underpins the permanent shift in grocery consumer behavior and elevates our position as one of America's leading e-commerce companies." Through the delivery network, the company now serves customers in Florida, as an example, without traditional brick-and-mortar stores.
The delivery network relies on highly automated fulfillment centers. At the hub sites, more than 1,000 bots whizz around giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.
As orders near their delivery times, the bots retrieve products from The Hive and are presented at pick stations for items to be sorted for delivery, a process governed by algorithms that ensures items are intelligently packed. Then, groceries are loaded into a temperature-controlled delivery van, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, considering factors such as road conditions and optimal fuel efficiency.
Related: Kroger Fulfillment Network Expands in Indianapolis; ShopRite Launches Robotic Deliveries.