Kroger closing three fulfillment centers as it shifts to hybrid e-commerce model
Kroger is closing three of its automated fulfillment centers while expanding partnerships with delivery apps as it moves toward changing how the company operates its online shopping experience.Kroger says it’s moving toward “hybrid eCommerce offerings” relying on its stores, delivery partners while still using automated warehouses when it makes sense.The grocer announced the changes Tuesday, saying it believes they will result in a simplified experience for customers and more profitability for the company. The company say its automated fulfillment centers in Pleasant Prairie, Wisconsin, Frederick, Maryland and Groveland, Florida will close in January as the company monitors its remaining facilities’ performance. The company expects the changes will result in a $400 million profit in 2026. But, it will first come with an accounting loss of about $2.6 billion in late 2025.”eCommerce remains a core part of serving customers who want better value, wide selection and flexible ways to shop,” said Ron Sargent, Kroger’s chairman and CEO. “We are building on a strong foundation with five consecutive quarters of double-digit eCommerce sales growth and increased profitability improvements. We are taking decisive action to make shopping easier, offer faster delivery times, provide more options to our customers, and we expect to deliver profitable sales growth as a result.”The grocer is adapting to its new partnerships, saying it’s now utilizing Instacart as its “primary delivery fulfillment provider across Kroger.com and the Kroger app.The company has also expanded partnerships with DoorDash and will soon launch a “new customer experience” on Uber Eats come early 2026. Kroger says it will continue to use large automated warehouses in areas with lots of online grocery demand with the goal of serving more orders quickly. It will also test lighter, cheaper automation inside busy stores to boost speed and improve the shopping experience.Kroger says sales in existing stores, excluding fuel, shouldn’t be hurt by the closures.”Every customer is different, and they expect more options to access fresh, affordable food, without compromising on the value or convenience,” said Yael Cosset, executive vice president and chief digital officer for Kroger. “Our differentiated approach, combining the proximity of our stores with high-capacity automation, the wide assortment of the fresh food they love, allows us to fulfill more trips for the families we serve. Being able to deliver food and groceries to tens of millions of families who shop with us every year, in as little as 30 minutes is a winning model for Kroger and our customers.” Kroger says the changes will result in customers seeing faster delivery, more delivery options and potentially better prices which will mostly powered by Instacart, with added reach via DoorDash and Uber Eats.
Kroger is closing three of its automated fulfillment centers while expanding partnerships with delivery apps as it moves toward changing how the company operates its online shopping experience.
Kroger says it’s moving toward “hybrid eCommerce offerings” relying on its stores, delivery partners while still using automated warehouses when it makes sense.
The grocer announced the changes Tuesday, saying it believes they will result in a simplified experience for customers and more profitability for the company.
The company say its automated fulfillment centers in Pleasant Prairie, Wisconsin, Frederick, Maryland and Groveland, Florida will close in January as the company monitors its remaining facilities’ performance.
The company expects the changes will result in a $400 million profit in 2026. But, it will first come with an accounting loss of about $2.6 billion in late 2025.
“eCommerce remains a core part of serving customers who want better value, wide selection and flexible ways to shop,” said Ron Sargent, Kroger’s chairman and CEO. “We are building on a strong foundation with five consecutive quarters of double-digit eCommerce sales growth and increased profitability improvements. We are taking decisive action to make shopping easier, offer faster delivery times, provide more options to our customers, and we expect to deliver profitable sales growth as a result.”
The grocer is adapting to its new partnerships, saying it’s now utilizing Instacart as its “primary delivery fulfillment provider across Kroger.com and the Kroger app.
The company has also expanded partnerships with DoorDash and will soon launch a “new customer experience” on Uber Eats come early 2026.
Kroger says it will continue to use large automated warehouses in areas with lots of online grocery demand with the goal of serving more orders quickly. It will also test lighter, cheaper automation inside busy stores to boost speed and improve the shopping experience.
Kroger says sales in existing stores, excluding fuel, shouldn’t be hurt by the closures.
“Every customer is different, and they expect more options to access fresh, affordable food, without compromising on the value or convenience,” said Yael Cosset, executive vice president and chief digital officer for Kroger. “Our differentiated approach, combining the proximity of our stores with high-capacity automation, the wide assortment of the fresh food they love, allows us to fulfill more trips for the families we serve. Being able to deliver food and groceries to tens of millions of families who shop with us every year, in as little as 30 minutes is a winning model for Kroger and our customers.”
Kroger says the changes will result in customers seeing faster delivery, more delivery options and potentially better prices which will mostly powered by Instacart, with added reach via DoorDash and Uber Eats.