Kroger opened America’s first automated warehouse in Monroe this week.
The $55 million, 335,000-square-foot customer fulfillment center features digital and robotic capabilities that allow Kroger to assemble an order of approximately 50 items in six minutes with robotics instead of approximately 30 to 45 minutes with a Kroger employee picking them up from various areas of the store.
Located along Ohio 63 in Monroe, the new facility — also known as a “shed” — is the first of 20 planned colossal automated warehouse/distribution facilities to be created as part of a partnership between Kroger and U.K.-based Ocado, one of the world’s largest dedicated online grocery retailers.
It’s set to employ more than 400 people.
The Cincinnati-based grocer completed the inaugural order at the facility on Wednesday, it said during a conference call to discuss fourth-quarter results.
“This marks the soft opening of the facility, and we look forward to our grand opening in early April,” Rodney McMullen, Kroger’s chairman and CEO, said during Thursday’s call. “We continue to be excited about the elevated experience that this will bring to our customers in the tri-state area and across the country as we continue to open additional facilities.”
Ocado is working to create similar partnerships with several grocery companies worldwide.
An Ocado “shed” helps grocers achieve a higher degree of fulfilling orders compared to the in-store experience, which often may find a grocer short on an item or out of it altogether, Ocado Solutions CEO Luke Jensen said at the June 2019 groundbreaking for the Monroe site
It also helps lower costs.
Kroger’s partnership with Ocado will “bring customers fresher food faster than ever before, accelerating our ability to provide anything, anytime, anywhere,” McMullen previously said.
Sixty million households shop with Kroger every year and the scale of its digital business has grown rapidly, McMullen said during today’s earnings call. During 2020, the grocer had over 1.3 billion customer interactions across its digital modalities, a 30% increase over last year, he said.
“Our significant reach allows us to meaningfully personalize the customer experience,” McMullen said.
In 2020, Kroger presented nearly 11 million personalized recommendations per week, he said.
“When you look at that over the year, that’s more than a half a trillion offered personalized for customers during 2020,” McMullen said.
Kroger plans to open other Ocado sheds this year, McMullen said. The company has announced locations for 10 of its 20 planned customer fulfillment centers.
The Ohio Tax Credit Authority voted in 2018 to approve an eight-year, 1.362 percent tax credit for the project. Kroger purchased the more than 98-acre property in Monroe in 2019 for $3.1 million, according to Butler County Auditor’s Office records.
Ohio Gov. Mike DeWine said in June 2019 that the state-of-the-art facility represents “the intersection of Ohio’s budding tech and food sectors and the next step in advancing Kroger customers’ shopping experiences.”