Kroger expands presence in South Florida with new spoke facility
- Kroger has opened a new spoke facility in South Florida, bringing grocery delivery to more customers.
- Kroger doesn’t have a large physical presence in the state, but focuses on e-commerce there.
- The new 60,000-square-foot spoke facility is part of Kroger’s partnership with Ocado Group, a technology services provider for grocery.
Kroger Co. is expanding its presence in Florida, opening a new spoke facility in Miami that will help power grocery delivery in the region.
The grocer, which is the fourth-largest grocery chain in the U.S. behind Walmart, Amazon and Costco, has just one physical store in Florida (near the Georgia border) but instead offers grocery delivery to customers in several regions of the state through its hub-and-spoke system.
According to a Feb. 1 release, the new South Florida spoke facility will result in the expansion of its delivery service in the state and bring on 90 new employees. Kroger says its delivery in the state includes fresh items, trusted national brands and its owned brands. The 60,000-square-foot facility will work alongside Kroger’s larger fulfillment center in Groveland, Florida. The new facility will enable delivery in communities between Port St. Lucie and Homestead, Florida, both east and west of I-95, the release said. The new options follow Kroger’s delivery offerings in Jacksonville and Tampa, Florida.
How the hub-and-spoke system works, according to Kroger:
- Orders are picked and packed by employees at the Groveland fulfillment center.
- Kroger employees place the orders in climate-controlled vehicles headed toward Miami.
- Orders arrive at the new spoke facility, where they’re checked and placed on refrigerated trucks.
- Orders are delivered from the spoke facility directly to customers’ homes.
"We've been working closely with the Kroger team since they started looking to expand to South Florida and knew this was a geography that would offer significant growth potential," said James Kohnstamm, executive vice president of the Miami-Dade Beacon Council, in the release. "From a customer standpoint, we have over a million households and hundreds of new residents relocating to Miami each week."
Kroger’s presence in South Florida is a product of a collaboration with the Ocado Group, a U.K.-based company specializing in e-commerce grocery delivery. Kroger and the Ocado Group first partnered in 2018 to use artificial intelligence, robotics and automation in Kroger’s fulfillment and spoke centers. The technology used in the facilities includes 1,000 robotsthat move around the facility in a 3D grid, called “The Hive” by the grocer. The bots bring the items to employees for picking, and they use algorithms to ensure products are appropriately packed (fragile items on top, for example). The technology also helps Kroger ensure each order is packed using the fewest number of bags possible — without becoming too heavy — to reduce plastic use.
Kroger last year announced plans to merge with rival grocer Albertsons in a move that still needs to be approved by federal regulators. If approved, the combination would make Kroger-Albertsons the second-largest food retailer in the U.S., putting it in closer competition with Walmart.