The warehouse, first of many, will house a hive a robots that can pull together a 50-item grocery order in as little as 5 minutes, thus saving labor time.
In a strategic development, Kroger Co has selected Cincinnati for the first of its twenty high-tech warehouses it plans on building with its UK-based Ocado Group Plc partner so as to dominate the U.S. grocery delivery business.
Kroger is the largest supermarket operator in the United States. It is fighting Walmart and Amazon.com Inc, to increase its market shares in a small but fast-growing online segment that accounts for anywhere between 1% to 4%of the $800 billion U.S. grocery market.
Earlier in May, Kroger had paid around $248 million for a minority stake in Ocado, an online grocer, and had struck an exclusive deal for the U.S. market.
Now, Kroger will spend $55 million, in the first project with its partner, on a 335,000-square-foot facility in Monroe, Ohio – a suburb north of Cincinnati.
Significantly, Ocado’s “sheds” house hives of robots that pick and pack groceries. These latest robots can pull together a 50-item grocery order in as little as 5 minutes, thus slashing Kroger’s labor costs significantly.
The development comes at a time when U.S. grocers are looking for ways to deliver basic essentials, including milk and eggs among others, in a profitable manner to customer doorsteps.
According to Kroger, the project is expected to create 410 jobs. It is also looking to secure state and federal incentives for the same.
As per Kroger’s spokeswoman, the facility is scheduled to open by 2021.