Retailers

What Will Kroger Deliver in Florida?

Powerful loyalty program and Ocado along for the ride as virtual brand debuts
Kroger delivery
Photograph courtesy of The Kroger Co.

Kroger on June 9 formally began the job of inviting grocery shoppers to check out its virtual arrival in the Sunshine State—bringing what it said was a differentiated, flexible and personalized delivery-only offering to Florida for the first time.

The launch—now live in Orlando and Tampa, and with shopping in Jacksonville available through a spoke location going live later this month—represents a public unveiling of its multimillion delivery warehouse in Groveland, Fla., built in partnership with British technology firm Ocado. Powered by Ocado’s sophisticated robotics and software, Kroger Delivery will emphasize what Kroger said would be advantages in fresh food and customer service in a way that existing competitors in the state cannot.

“Kroger is uniquely positioned to transform grocery e-commerce in Florida because of our differentiated offering that brings high-quality fresh groceries directly to our customers' doorstep. The service features fresh food, adult beverage, and personal care products, affordable prices and promotions, and a best-in-class fuel rewards loyalty program," Bill Bennett, Kroger's VP of e-commerce, said in a statement. “This innovative, customer-centric offering is delivered by our professionally trained and friendly Kroger Delivery associates, providing our customers with anything, anytime, anywhere and broadening our reach and products to new geographies.”

As previously reported, Kroger has been at work on a “soft opening” for weeks now, including its participation as a sponsor in a Tampa Pride parade last month. The Florida arrival will be something of a test of the retailer’s ability to crack new geographies and the power of its vaunted loyalty programs: Aside from a single Harris Teeter store in Fernandina Beach in the northeastern most part of the state, Kroger has no current physical store presence in Florida. It last operated stores there in the 1980s, and then under since-sold banners such as Florida Choice.

Kroger Delivery earlier this spring launched for the first time in greater Cincinnati, bolstering leading physical-store market shares there.

The 375,000-square-foot Ocado facility in Groveland brings the potential to do the volumes of at least a few dozen stores. Kroger will carry out the offering through a delivery experience that it said will differentiate in a state where competitors like Publix, Aldi, Winn-Dixie and Walmart rely primarily on crowdsourced delivery from stores—an offering representing faster fulfillment but vulnerable to compromised store inventories, picking inefficiencies and inconsistent service.

Kroger is counting on Ocado technologies to provide more accurate fulfillment rates, a lower cost to pick, and efficiencies in delivery routing and other logistics. Deliveries will be made by dedicated drivers in branded, temperature controlled delivery trucks and will not require tips. Kroger is also porting its advanced loyalty program to shoppers in Florida, with its offering of a fuel rewards through Shell, digital coupons and personalized offers.

Kroger Delivery said it would charge variable delivery fees that are to be influenced by a number of factors like a customer's loyalty, delivery window popularity, route optimization and order lead time. This will allow for additional discounted options where Kroger has the flexibility to offer them, creating a personalized offering and delivering value to customers “in ways that matter,” the company said.

“We are pleased Kroger selected the Tampa Bay and Hillsborough County regions to expand the company’s e-commerce reach in the State of Florida,” said Pat Kemp, chair of the Hillsborough County Board of County Commissioners. “Kroger will be an integral part of our community as they expand and grow here. We look forward to providing them the partnership and supportive environment needed to develop a talented workforce and successful business operations.”

“Every citizen in Jacksonville should have access to affordable, healthy, and fresh foods,” said Lenny Curry, mayor of Jacksonville. "We welcome Kroger into our community and are very encouraged that this delivery service will fill an important gap for people who don't have easy access to groceries."

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