Kroger to build automated warehouse in Phoenix

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arizonaguy
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Kroger to build automated warehouse in Phoenix

Post by arizonaguy »

It looks like they're building another Ocado warehouse.

https://www.bizjournals.com/phoenix/new ... lfill.html

For $89 million they could build at least 3 or 4 traditional stores with fulfillment capabilities.

I am not sure Kroger's strategy here. Everyone else (including Walmart and even Amazon) seems to be utilizing a fulfilment model based at the store level (Amazon uses Whole Foods and Amazon Fresh stores as fulfilment centers). Kroger has the most stores of anyone in the Phoenix area. It seems to me it would be a more sound strategy to do fulfillment at the store level versus at a warehouse level.

This seems to be another example where Kroger has lost its way, unless I'm missing something.
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Re: Kroger to build automated warehouse in Phoenix

Post by storewanderer »

arizonaguy wrote: January 22nd, 2021, 9:13 am

I am not sure Kroger's strategy here. Everyone else (including Walmart and even Amazon) seems to be utilizing a fulfilment model based at the store level (Amazon uses Whole Foods and Amazon Fresh stores as fulfilment centers). Kroger has the most stores of anyone in the Phoenix area. It seems to me it would be a more sound strategy to do fulfillment at the store level versus at a warehouse level.

This seems to be another example where Kroger has lost its way, unless I'm missing something.
Kroger could be right here. It is tough to tell since they are building multiple of these warehouses before they even have one in operation yet to see how operations would work out...

I know they are using technology that has been used overseas by other retailers and are going off of that to assume this is a sound strategy... but just because something works overseas does not mean it will work in the US. I think they should have gotten one of these warehouses going first to see how it would go, before building so many all over the US. But that is just my opinion.

Meanwhile competitors seem to be investing more in their stores... I buy way more now from Safeway than I buy from Smiths and find Safeway to have better product quality across the fresh departments, better mix in frozen foods, weaker on most of center store/drug but acceptable, and I like their loyalty program better- the Safeway app is easier to use and I like the "Rewards Point" option to redeem on discounts in the store vs. Kroger's "gas only" loyalty point program. As a customer, I am extremely disappointed in Kroger over the past couple of years; the shopping experience is worse, store conditions are awful due to how terrible Kroger's remodels have been (both cosmetically and in how they slot items on shelves-very misallocated shelf spacing for items and way too many out of stocks), fresh departments have declined in quality and were never great, and that app- last week I had 900+ digital coupon offers (can only add 150 at once). I gave up after 10 minutes and I was only through about 20% of the offers.

Kroger is seriously losing sales with this out of control digital coupon app - seriously 900+ offers for me to scroll through then I can only add up to 150 offers? 3 different offers for .50 off 4 Kroger Yogurts - one for light, one for blended, one for fruit on bottom? Is this just a joke or are they trying to confuse the customer? They got me recently as in the past they always had a coupon on some Simple Truth sausage (link or round) and I added it, as I have many times in the past. I paid and it didn't work. Come to find out, there were now 2 different digital coupons for the Simple Truth Sausage- one for the patties and one for the links. I had added the wrong offer. I really felt somewhat deceived by this. I haven't bought that there again since (found a great sausage in a different brand at Sprouts anyway). And I didn't buy any yogurt there last week either. Safeway had a single digital offer - .29 Lucerne Yogurt. One offer. Period. No minimum purchase (may have had a limit)- and I mixed/matched some lights, some lowfats, etc. Or at WinCo the cheapest yogurt is just .32 out the door.

I was a really loyal customer to Kroger divisions for a good 10 years, but the past couple of years have really turned me away between too many out of stocks, the "no Visa card" thing, the 8 PM closing time during the spring (earlier than anyone else), and the pricing. It will be interesting to see what happens in the future. Though they went back on the "no Visa" thing and brought the operating hours back up to 11 PM even after those two moves I still shop there far less than I used to, and am less and less satisfied with the place. Kroger still runs very high volume stores generally.
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