Grocery giant Kroger is expected to announce today that it’s launching a food delivery service for metro Atlanta out of its massive new distribution facility in Forest Park.
The Cincinnati-based company says it hopes to be able drop off groceries as far away as 90 miles from Clayton County in the coming months and will serve areas where it doesn’t have physical stores, especially food deserts where getting fresh produce and meat is a challenge.
“We’ll have a very wide radius,” said facility general manager David Matthews during a Wednesday tour, adding that deliveries could be made as north as Gainesville and as far south as Macon. “So we figure we’ll have a lot of Georgia covered.”
The move comes as food-delivery demand has surged due to COVID-19. Americans who don’t want to go into grocery stores or restaurants have increasingly turned to Instacart, Uber Eats, DoorDash and others to pick their food up for them and Kroger wants a piece of that business.
In addition, Walmart, one of Kroger’s biggest competitors, has launched its own grocery delivery service, Walmart Plus.
“For people who don’t have cars or are time constrained, this is going to appeal to them,” Denish Shah, an associate professor of marketing at Georgia State University, said.
Shah said in the short term Kroger will likely lose money because of the upfront costs, but can come out ahead if the Kroger blue vans become as ubiquitous as Amazon’s trucks and the company creates brand loyalty.
The addition of the fulfillment center also means hundreds of jobs for Clayton County. Matthews said as many as 400 workers are needed for the 350,000-square-foot building and its fleet of 200 vans.
“Technically this is about 26 stores under one roof,” Matthews said.
Forest Park Mayor Angelyne Butler said the fulfillment center is one of several that have found a home at the former Fort Gillem Army Base, now rechristened Gillem Logistics Center. Others include Amazon, HD Supply and box supplier The Packaging Wholesalers.
“The jobs are here,” Butler said. “With Forest Park being a logistics hub, a lot of companies are attracted to our access to the interstates and that Hartsfield-Jackson (International) airport is right here in our backyard.”
Unlike Instacart or Grubhub, Kroger will focus on next-day delivery, Matthews said. While it can get groceries to customers on the same day through its partnership with Instacart, Kroger is more interested in bigger grocery shopping trips than last-minute dinner planning.
“We are built for next-day delivery,” he said. “We do have some same-day capability if you for instance order before 10 a.m., but that’s not our focus.”
The cost of the service will be $6.95 for individual deliveries or $59 a year for unlimited next-day dropoffs through Kroger Boost.
Parts of the Forest Park facility mimic an everyday grocery store. In one area, the temperature is kept at a comfortable 70 degrees, while the fruits and vegetables section is set to a crisp 34 degrees. A giant freezer holding rows of frozen items is set at 10 below 0.
Kroger partnered with England-based e-commerce company Ocado Group to supply the technological backend of the operation, which includes robots that monitor inventory. The Forest Park facility is the third fulfillment center Kroger has built nationally for food delivery and it has plans for smaller distribution points in Tennessee and Alabama.
Matthews said deliveries will come with dry ice to keep non-perishables fresh after leaving the building, one of the biggest challenges the company expects to face as drivers navigate Atlanta’s notoriously congested traffic.
“We’re different than a store where you can go and pick your own,” he said. “We know people are apprehensive about produce. So every item of produce we check it. We make sure it’s fresh and throw the bad away.”
Bill Bennett, who leads Kroger’s e-commerce division, said he expects the company’s delivery business to flourish, even when the pandemic ends and customers feel more comfortable going back into stores.
“This gives us an opportunity to help customers see the convenience and the level of service that can come from grocery delivery,” he said. “Once you try it and change your behavior, it’s really hard to go back again.”
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