More and more people are growing accustomed to getting their groceries delivered straight to their door. Online grocery shopping sales skyrocketed during the COVID pandemic and have only continued to grow, according to the U.S. Food and Drug Administration (FDA). As a result, many retailers including Walmart and Target have opted to expand their delivery services for customers. However, this is not the case for all companies, as Kroger announced it will be cutting delivery for some customers in the next few months.
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According to the company's website, there are currently 1,239 Kroger stores located throughout 16 states: Alabama, Arkansas, Georgia, Illinois, Indiana, Kentucky, Louisiana, Michigan, Missouri, Mississippi, Ohio, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
But three years ago, the grocer decided to try to work its way into areas where it does not operate physical stores by opening spoke facilities that only fulfill delivery orders.
Through a partnership with the technology company Ocado Group, Kroger started this experiment in 2021 by opening a center in Groveland, Florida, marking its first-ever entry into the state "with an e-commerce delivery service that combines vertical integration, machine learning, and robotics with affordable, friendly, and fast delivery of grocery items and fresh food."
Since then, the company has continued to expand its delivery services to new markets by opening up these spoke facilities in Austin, Birmingham, Cleveland, Oklahoma City, Orlando, San Antonio, and Miami.
However, Kroger is now planning to pull its delivery expansion back from three cities: Austin, San Antonio, and Miami. A spokesperson for the company confirmed to Best Life that it will be permanently closing its e-commerce fulfillment facilities in these cities.
"Kroger’s commitment to innovation means that we test and learn quickly to identify the most effective ways to deliver fresh, affordable food to our customers," they said in a statement. "Despite our best efforts, including the support from new customers, learnings from other locations and the incredible work of our associates, these facilities did not meet the benchmarks we set for success."
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An announcement sent from Kroger to impacted customers indicates that the three facilities are set to close on May 25, the Austin American-Statesman reported. The notice also informs customers that there will be no Kroger stores or delivery options available in Austin, San Antonio, or South Florida after the closures, according to the newspaper.
"We want to express our deepest gratitude to our associates for their hard work and are committed to providing support and resources to them during this transition," Kroger's spokesperson added in its statement to Best Life.
This doesn't mean Kroger is moving away from delivery altogether, though. The company's spokesperson said, "Kroger remains committed to growing its e-commerce offerings, delivering fresh food to more communities across the U.S."
"Additionally, this decision does not impact the company’s other automated fulfillment centers or cross-docking spoke locations," they added.
A memo sent to employees at the Miami spoke indicated that Kroger is still planning to invest in its other e-commerce centers, according to Supermarket News, which obtained a copy of the memo.
"The Kroger Fulfillment Network is growing in other markets, and the company is offering relocation assistance for those interested in moving to a new location," the company stated in the memo.
