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Kroger, the largest U.S. supermarket operator, is battling
Walmart Inc and Amazon.com Inc in the small, but fast-growing
online segment that accounts for anywhere from 1 percent to 4
percent of the $800 billion U.S. grocery market. (Graphic:
https://tmsnrt.rs/2LYQUUV)
In May, Kroger paid roughly $248 million for a minority stake in
Ocado, an online grocer, and struck an exclusive deal for the
U.S. market.
Kroger will spend $55 million on the partners' first project - a
335,000-square-foot facility in Monroe, Ohio, a suburb north of
Cincinnati.
Ocado's "sheds" house hives of robots that pick and pack
groceries. The company's newest machines can pull together a
50-item grocery order in as little as five minutes - potentially
slashing Kroger's labor costs at a time when U.S. grocers are
looking for ways to profitably delivery milk, eggs and other
necessities to customer doorsteps.
Kroger said the project, which is expected to create 410 jobs,
is subject to securing state and local incentives. The facility
is scheduled to open by 2021, a Kroger spokeswoman said.
Amazon was the top online grocery seller before its $13.7
billion purchase of Whole Foods Market last summer that spurred
rival grocery sellers to invest in cost-saving automation.
Kroger, Walmart and Ahold Delhaize each have partnered with
technology companies that build automated order fulfillment
warehouses.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Lisa
Shumaker and Cynthia Osterman)
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