CHINA – 2023/09/02: In this photo illustration, a Kroger logo is displayed on the screen of an iPhone. (Photo Illustration by Sheldon Cooper/SOPA Images/LightRocket via Getty Images)
Kroger is shuttering three of its spoke facilities in its Texas and Florida e-commerce operations, the grocery chain confirmed this week.
The cross-docking facilities — located in Austin, San Antonio and Miami — will be closed at the end of May, a Kroger spokesperson told The Associated Press Thursday, adding that all impacted associates had been offered other opportunities within the company.
“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," Kroger's spokesperson said.
The spokesperson added that that the retailer "remains committed to growing its e-commerce offerings, delivering fresh food to more communities across the U.S.”
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These kinds of spoke facilities extend the reach of Kroger’s network with British online retailer Ocado. Ocado's larger automated facilities assemble orders, which are then shipped to the cross-docking spokes and placed into smaller delivery trucks.
Amid rising competition in e-commerce particularly seen during the pandemic era, Kroger and Ocado have continued to expand their partnership over recent years — including through the construction of additional fulfillment centers and the development of in-store order capabilities.
The cross-docking spokes set to close in Austin and Miami were opened in March and February of last year, according to Kroger's spokesperson, while the one in San Antonio was opened in August 2022.
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The Austin and San Antonio facilities have been receiving orders from a larger automated shed in Dallas, which was opened in 2022. Another regional shed in Groveland, Florida opened in June 2021 and has been serving the Miami spoke.
Both the Dallas and Groveland facilities will continue to operate. The decision to close the Austin, San Antonio, and Miami spokes will not impact these larger facilities or any other cross-docking locations, Kroger's spokesperson said.
Cincinnati-based Kroger posted earnings of $2.96 per share for 2023, with total company sales hitting $150 billion last year. That's up from 2022's earnings of $2.76 per share and $148.3 billion in revenue.
In recent months, Kroger has also made headlines over the prospect of a merger with Albertsons. The two grocery chains, which are among the largest in the United States, had hoped to complete the $24.6 billion deal this year — but their plan faces legal challenges that make it look far less likely, at least any time soon.
