Kroger announced Nov. 18 it would shutter three of its once-hyped robotic delivery warehouses as it retools its $12 billion-a-year e-commerce business.
The Cincinnati-based supermarket giant will shutter customer fulfillment centers in Florida, Maryland and Wisconsin in January. The company will write off $2.6 billion in related charges as a result of the move.
Kroger seeks to make digital business more profitable
Kroger said the closures and other adjustments will improve its digital business by $400 million annually. The company plans to maintain the highly-automated operations in markets where it has heavy demand, including Ohio, Kentucky, Indiana, Georgia, Texas, Alabama, Colorado and Michigan.
The grocer previously cut three of the delivery hubs in 2024 – in markets where Kroger didn’t have a strong store presence. The company generally finds that its digital business thrives in markets where its retail stores are also strong.
Closures follow boosted ties with third-party delivery platforms
Kroger also disclosed it plans to begin shifting some of its in-house delivery operations from the robotic warehouses to its existing grocery stores. The announcement of closures comes weeks after Kroger has also unveiled enhanced partnerships with third-party delivery providers, including Instacart, DoorDash and Uber Eats.
“eCommerce remains a core part of serving customers who want better value, wide selection and flexible ways to shop,” Interim CEO Ron Sargent said in a statement. “We are taking decisive action to make shopping easier, offer faster delivery times, provide more options to our customers, and we expect to deliver profitable sales growth as a result.”
Kroger is Cincinnati’s dominant grocer
Based in downtown Cincinnati, Kroger employs 409,000 workers nationwide, including roughly 20,000 in Greater Cincinnati.
Kroger operates 76 stores in Greater Cincinnati and Northern Kentucky, employing 14,500 associates. The grocery operates more than 2,700 stores in 35 states and the District of Columbia under several regional supermarket names, including Fred Meyer, Harris Teeter, Ralphs, Mariano’s, Fry’s, Smith’s, King Soopers, QFC and others.
