I think they mentioned Dallas as one of the sites, which sounds like a good test, since Kroger has stores in Dallas already, and they do pretty well, all things considered. Even if Tom Thumb/Albertsons/Market Street has more stores (which I'm not sure if they do), Kroger runs circles around them when it comes to volume, and Ocado would be useful if there's actually more grocery market share to them or if it just cannibalizes their own stores.storewanderer wrote: ↑April 14th, 2021, 11:38 pmYes, but I am impressed they are actually running delivery trucks, etc. I have my opinions on how this money pit project will turn out, but let's see.pseudo3d wrote: ↑April 14th, 2021, 8:36 pm This still seems like an expensive distraction. I'm not sure what percentage of delivery grocery shopping regular stores operate from, but for the most part it's probably not much.
If Kroger wanted to invest in Florida, then they can expand Harris Teeter beyond their one store in the state (which they DID expand), not by offering a half-baked novelty delivery service. They could knock off some business from Publix and Walmart, but even then, "but it's not Publix" didn't save Albertsons' last gasp in the state, and probably won't pave the way for Kroger to open full stores in the state.
More importantly, the whole project (assuming it doesn't turn out to be a money-losing failure) just robs capex from other divisions.
Actually I think they should have tried it in a few very dense markets first- New York, San Francisco, to see if it would even work in those places. Maybe not under the name Kroger either.
What I want to know- which they likely do know- is if it is so much cheaper to fulfill via these warehouses, that they could just tell customers who currently use the in-store pick up that they will deliver their orders to their home at the same price as the in-store pick up (since this automated warehouse should use a lot less labor than the in-store pick up) but I am thinking whatever labor savings comes from not picking the order a big chunk will be lost in driving it to someone's home. But in real dense areas where the delivery truck did not have to drive far, it could pan out.
And even if it does cannibalize their own stores, that would disincentivize adding brick-and-mortar stores in the area...which I guess is what they want to do regarding Florida later down the line?