Ghost grocery: Kroger wants to lead the e-grocery trend with robots, not stores

Publix is sweating... Kroger, aka America's largest grocery chain, owns supermarket staples like Food 4 Less, Ralphs, and... Kroger. The 138-year-old Cincinnati-based grocer has 2.8K stores in 35 states. Now Kroger is getting techy to expand beyond its OG stores. Last year, Kroger debuted two "ghost kitchens," or delivery-only restaurants. Kroger is going all out on ghost grocery.

• Giant robo-warehouse: Kroger is breaking into Florida with a brand-new robot-powered warehouse that's nearly the size of eight football fields.
• Call them Grobots: Grocery robots retrieve items like bananas, steak, and oat milk from the warehouse, passing them on to delivery drivers.
• DIY delivery: Kroger is using its own grocery-delivery fleet, unlike Publix (which uses Instacart) and Albertsons (which uses DoorDash).

The e-cart is hot... It’s a massive investment for Kroger, and a risky bet on its ecomm strategy. Kroger has already opened two automated warehouses, with plans for at least nine more over the next two years, including in the Northeast. It spent $55M just to build its FL warehouse and hired 900 employees to service it. Last year, Walmart unveiled plans to build a similar warehouse with robots that can pick 800+ grocery products/hour. Here's why:

• Online grocery makes up 12% of all grocery sales — down from 20% mid-pandemic, but way up from 2% pre-pandemic.
• Half of US households ordered e-groceries in September. Kroger thinks that number will keep growing.