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New Kroger Ocado Facility Takes Aim at Mid-Atlantic Rivals

Frederick, Md., revealed as site for forthcoming shed
Photograph courtesy of Kroger

The Kroger Co., which is determined to take food retail e-commerce nationwide in partnership with Ocado, revealed a location and timeline to build a robotic fulfillment center in the mid-Atlantic region.

The facility, to be built in Frederick, Md., and expected to open in about two years, will put the Cincinnati-based grocer in a largely unfamiliar territory for its stores but squarely in the sweet spot of conventional rivals such as Albertsons Cos. and Ahold Delhaize, serving food shoppers in the Baltimore, Washington and Philadelphia markets. This facility—along with another underway in Florida, where Kroger also operates few physical locations—will test the retailer’s ability to win new shoppers and challenge incumbents to hold onto theirs.

Ocado officials have said their facilities could support about $1 billion in annual sales, which would be something akin to a planting a few dozen new supermarkets in the populous region.

“Kroger is incredibly excited to construct one of our industry-leading customer fulfillment centers in Maryland in relationship with Ocado to bring fresh food to our customers faster than ever before,” Robert Clark, Kroger’s SVP of supply chain, manufacturing and sourcing, said in a statement. “Through our strategic partnership, we are engineering a model for the region, leveraging advanced robotics technology and creative solutions to redefine the customer experience.”

Kroger has a presence in greater Washington through its Harris Teeter stores but trails Albertsons, operator of the Safeway and Acme brands, and Ahold Delhaize’s dual Giant Food brands. The facility will be located at 7106 Geoffrey Way in Frederick, Md., confirming an earlier announcement identifying the mid-Atlantic region as one of the first “shed” locations.

“This site will be key to delivering amazing grocery experiences to households across Maryland, Pennsylvania and the District of Columbia. It will also create fantastic job opportunities for engineers looking to work alongside state-of-the-art robotics and automation,” said Luke Jensen, CEO of Ocado Solutions. “The warehouse will be a key component of the seamless fulfillment ecosystem that Kroger is developing for customers across the United States. Ocado's proven technology will allow Kroger to achieve the lowest cost-to-serve in the market, combined with the best freshness, accuracy and service.”

This 350,000-square-foot fulfillment center will accelerate Kroger’s ability to expand its products to a larger footprint. Upon completion, 400 new jobs will be created, with up to 100 more added later as the service area of the facility expands.

“We are thrilled that these two respected companies have chosen Maryland as the location for a new high-tech, innovative mid-Atlantic hub,” said Maryland Gov. Larry Hogan. “This is a big win for Frederick County and yet another shining example that Maryland truly is open for business.”

 

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