Gigantic warehouse deploys robots, artificial intelligence and autonomous-navigation to pick, pack and deliver orders.

CINCINNATI – Kroger announced that the first of 20 customer fulfillment centers (CFC) it is developing in partnership with British online grocer Ocado Group PLC is ready to fulfill orders from online shoppers.

The gigantic warehouse, in Monroe, Ohio, north of Cincinnati, deploys robots, artificial intelligence and autonomous-navigation software to pick and pack merchandise and deliver it to customers. Kroger is betting that the investment in machine learning will allow the company to satisfy shopper demand for rapid delivery without having to take on an army of humans to run the centers.

“It’s truly uplifting to reach this moment in Kroger’s history – better yet, grocery industry history – with our partners at Ocado,” Rodney McMullen, Kroger’s chairman and chief executive officer, said April 14 in a press release.

“The shed,” as the partners refer to the 375,000-square-foot warehouse, features some 1,000 robots alongside 400 humans. Merchandise will be delivered in temperature-controlled Kroger Delivery vans, capable of accommodating up to 20 orders and running on Ocado software and mapping algorithms to optimize deliveries along the fastest and most efficient routes.

Kroger and Ocado announced their partnership in 2018, with McMullen explaining that the investment would establish a seamless digital ecosystem that would go a long way toward helping Kroger realize the goals of its Restock Kroger program to redefine the grocery experience and create shareholder value.

The opening of the first consumer fulfillment center advances Kroger’s position as “one of America’s leading e-commerce companies,” McMullen said in the statement. “The momentum we’re experiencing is well-timed with the evolution of Kroger Delivery, underpinning the permanent shift in grocery consumer behavior and need for enterprising and modern e-commerce and last-mile solutions — today’s true competitive horsepower.”

McMullen said Kroger’s digital sales increased by 116% in 2020, with the retailer’s e-commerce business accounting for more than $10 billion in sales.

“This moment marks the next phase of our partnership, and it comes against the backdrop of soaring demand for online grocery options in the U.S. and worldwide. In the coming years, we will open more automated CFCs across a range of sizes with Kroger,” said Tim Steiner, Ocado’s co-founder and CEO. “We will also roll out components of our software solutions to stores in collaboration with Kroger’s existing seamless platform to support fulfillment of curbside pickup orders. The breadth of this fulfillment ecosystem will be crucial in helping Kroger to continue to win in e-commerce across the U.S.”