Kroger picks Cincinnati for first grocery e-commerce DC

Grocery shoppers in Cincinnati will soon be able to order their fruits and veggies online, thanks to a highly automated warehouse planned by supermarket chain the Kroger Co. and its automation partner, Ocado Group plc, the firms said today.

Cincinnati-based Kroger announced last month that it had agreed to order three of those customer fulfillment centers (CFCs) by the end of 2018 and a total of 20 CFCs over the first three years of the partnership.

Ocado, a British firm which operates an online grocery and general merchandise retail business of its own in the U.K., will develop those sites by installing mechanical handling equipment (MHE) modules that perform automated storage and retrieval.Kroger owns a six percent stake of Ocado and the exclusive rights to use its technology in the U.S.

The first location for these automated warehouse facilities with digital and robotic capabilities—known as "sheds"—will be in Monroe, Ohio, a suburb north of Cincinnati, Kroger announced today.

Kroger and @ocado's first customer fulfillment center (CFC) will be in Ohio. The CFC will introduce innovative robotics technology, allowing for next-generation automated storage and retrieval. Kroger is planning to open 20 CFCs in the U.S. Read more: https://t.co/RgqYVhl5zn pic.twitter.com/NKSrTKvXQp

— Kroger News (@KrogerNews) November 19, 2018

The deal is subject to Kroger securing state and local incentives, the firm said. Kroger did not detail the type or value of sweeteners it is seeking. However, the company said it will invest $55 million to build the first shed, which will measure 335,000 square feet and generate more than 410 new jobs.

"Ocado is a UK-based company with global ties and advanced digital and robotic capabilities," Alex Tosolini, Kroger's senior vice president of new business development, said in a release. "Working together, we will develop the strongest possible supply network to support a seamless customer experience that can serve every person in America. It's all about building a seamless supply chain to provide our customers with an amazing shopping experience."

Each shed will operate on Ocado'sOcado Smart Platform (OSP) suite, which runs highly efficient warehouse operations for the single pick of products, together with applications ranging from user interfaces, through warehouse operating and control systems, logistics, route planning, and optimization, the firm said.