Kroger opening distribution center in Maryland

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cw06
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Kroger opening distribution center in Maryland

Post by cw06 »

https://www.bizjournals.com/baltimore/n ... er-in.html

Looks like Kroger will be building an Ocado automated warehouse in Frederick, MD. My question is, will this warehouse service the existing Harris Teeter stores here in Maryland, or be a completely separate supply chain?
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Re: Kroger opening distribution center in Maryland

Post by buckguy »

In one article, it is said to be serving PA, as well as DC, MD, & VA, so I wonder where they will be expanding.
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Re: Kroger opening distribution center in Maryland

Post by klkla »

cw06 wrote: January 23rd, 2020, 10:12 am https://www.bizjournals.com/baltimore/n ... er-in.html

Looks like Kroger will be building an Ocado automated warehouse in Frederick, MD. My question is, will this warehouse service the existing Harris Teeter stores here in Maryland, or be a completely separate supply chain?
This distribution center will not support stores. It is specifically for fulfillment of online orders that are shipped directly to consumers..
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Re: Kroger opening distribution center in Maryland

Post by cw06 »

Digging deeper, they said last year these warehouses would also serve brick and mortar stores. There must be a conventional palletized distribution component in addition to the automated side.
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Re: Kroger opening distribution center in Maryland

Post by buckguy »

Online or brick and mortar, the PA part is what's interesting in terms of where they want to go next and whether it would be H-T or some other banner. H-T is odd, they seem to be investing in DC despite small market shares and stores that rarely seem very busy---there's one in DC that fills up during the evening rush but is otherwise dead and suburban stores that always seem dead. DC has a big connection to North Carolina (H-T's base) but I doubt that PA does.
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Re: Kroger opening distribution center in Maryland

Post by cw06 »

buckguy wrote: January 24th, 2020, 6:42 am Online or brick and mortar, the PA part is what's interesting in terms of where they want to go next and whether it would be H-T or some other banner. H-T is odd, they seem to be investing in DC despite small market shares and stores that rarely seem very busy---there's one in DC that fills up during the evening rush but is otherwise dead and suburban stores that always seem dead. DC has a big connection to North Carolina (H-T's base) but I doubt that PA does.
If they do put brick and mortar stores in PA, it would probably be Kroger and not HT. Central PA is an economically depressed area, people there aren't going to pay HT prices.

HT had stores planned in the northern suburbs of Baltimore (Bel Air, Timonium, Towson), but never built them. Plenty of managers I worked for came onboard expecting to get their own departments at these new stores, but left when they never panned out. The supply chain is pretty stretched as it is, fresh product coming up from NC was always on the edge of going off-date by the time it got to us. Maybe this new distro center will let them expand themselves.

On the other hand if it's just an online-only warehouse, expanding into areas where they have no stores seems risky. They don't have the name recognition that Amazon and Walmart do the would make people go to them first for an order.
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Re: Kroger opening distribution center in Maryland

Post by cw06 »

buckguy wrote: January 24th, 2020, 6:42 am Online or brick and mortar, the PA part is what's interesting in terms of where they want to go next and whether it would be H-T or some other banner. H-T is odd, they seem to be investing in DC despite small market shares and stores that rarely seem very busy---there's one in DC that fills up during the evening rush but is otherwise dead and suburban stores that always seem dead. DC has a big connection to North Carolina (H-T's base) but I doubt that PA does.
It's also possible they have no plan at all, and they're just building robotic warehouses because Amazon has them. In that case they'll undercut their own subsidiary until they get bored and pull the plug with no notice. Look at how they were funding new Lucky's stores right up until that earnings call in November.
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Re: Kroger opening distribution center in Maryland

Post by mbz321 »

buckguy wrote: January 23rd, 2020, 12:08 pm In one article, it is said to be serving PA, as well as DC, MD, & VA, so I wonder where they will be expanding.
PA? Interesting. I wonder if they have ideas in the future to buy out Weis or possibly Acme.
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Re: Kroger opening distribution center in Maryland

Post by klkla »

cw06 wrote: January 24th, 2020, 5:42 am Digging deeper, they said last year these warehouses would also serve brick and mortar stores. There must be a conventional palletized distribution component in addition to the automated side.
I'm not doubting you, but the Supermarket News article linked below explains the Ocado partnership and doesn't mention supporting stores at all. Do you have a link where they say they will be supporting stores with these DCs?

"Kroger said Thursday that the 350,000-square-foot customer fulfillment center (CFC) will be constructed at 7106 Geoffrey Way in Frederick and fill online grocery orders for shoppers in Maryland, Pennsylvania and the District of Columbia."

"Ocado CFCs use digital and robotic technology to service e-grocery orders. When unveiling their partnership in May 2018, Kroger and United Kingdom-based Ocado said they plan to open 20s CFCs in the United States over the next three years. The companies aim to replicate the CFC model as they build the facilities across the country, extending Kroger’s online grocery reach — possibly into new markets where the Cincinnati-based retailer doesn’t have stores. Kroger has said the CFCs cost about $55 million apiece to build and will give customers “anytime, anywhere” ability to place online orders. "

Maybe they meant they will ship to stores for customer pick up? https://www.supermarketnews.com/online- ... e-maryland
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Re: Kroger opening distribution center in Maryland

Post by storewanderer »

klkla wrote: January 24th, 2020, 3:17 pm
cw06 wrote: January 24th, 2020, 5:42 am Digging deeper, they said last year these warehouses would also serve brick and mortar stores. There must be a conventional palletized distribution component in addition to the automated side.
I'm not doubting you, but the Supermarket News article linked below explains the Ocado partnership and doesn't mention supporting stores at all. Do you have a link where they say they will be supporting stores with these DCs?

"Kroger said Thursday that the 350,000-square-foot customer fulfillment center (CFC) will be constructed at 7106 Geoffrey Way in Frederick and fill online grocery orders for shoppers in Maryland, Pennsylvania and the District of Columbia."

"Ocado CFCs use digital and robotic technology to service e-grocery orders. When unveiling their partnership in May 2018, Kroger and United Kingdom-based Ocado said they plan to open 20s CFCs in the United States over the next three years. The companies aim to replicate the CFC model as they build the facilities across the country, extending Kroger’s online grocery reach — possibly into new markets where the Cincinnati-based retailer doesn’t have stores. Kroger has said the CFCs cost about $55 million apiece to build and will give customers “anytime, anywhere” ability to place online orders. "

Maybe they meant they will ship to stores for customer pick up? https://www.supermarketnews.com/online- ... e-maryland
I never heard of these Ocado warehouses supplying stores either. I thought it was strictly for online ordering as the technology Ocado has developed is specialized particularly for direct consumer fulfillment.

I am really curious they are building a warehouse in FL yet their former investment "Lucky's" is closing all of its stores there. I guess they see this as a growth vehicle but how much bad PR are they getting over what happened with this "Lucky's" thing?

I am a little curious why Kroger does not open a couple of these warehouses and get them operating, and see how they actually do, before committing to building so many of them.

Kind of like their former investment "Lucky's" in FL who quickly opens 21 stores then has 14 more in development but then closes 20 of the stores and announces the ones in development will not be opening. If there were issues in the market, why were so many stores opened and so many in development?

I wonder if Kroger owns these fulfillment centers outright of if they are investing in Ocado like they invested in "Lucky's."
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