Kroger. (Photo: Kimberly P. Mitchell, Detroit Free Press)
Kroger announced Monday its has picked Romulus as the site for a $95 million customer fulfillment center aimed at the rapidly growing online grocery shopping segment.
The high-tech automated center, one of three planned by Kroger in the U.S., will create 250 jobs, the company said in a news release.
The 135,000-square-foot Romulus facility will be built on 22-acre site at 15675 Wahrman, as part of the Detroit Region Aerotropolis Development Corporation area. Once ground breaks on the site, the facility is expected to be operational in 18 months.
The CFC model in Romulus — an automated warehouse facility with digital and robotic capabilities — will be used to serve customers across the region, Kroger said. This facility will support the Michigan, northern Ohio and Indiana markets.
Kroger announced in June it was partnering with Ocado Solutions, which provides the infrastructure for automated warehouse operations, to build fulfillment centers in the Great Lakes, Pacific Northwest and West regions, but did not name exact locations.
Online grocery shopping has grown exponentially this year. When the COVID-19 pandemic hit last March, customers flocked to ordering groceries online for curbside pickup or home delivery. Shopping services like Instacart and Shipt saw sharp upticks in customers and orders. Shoppers also rushed to ordering through Amazon, Target and Walmart. Most grocery stores, if they hadn’t already had a shopping service, began to do so.
Fast forward seven months into the pandemic and many shoppers have settled into online grocery shopping as a new normal.
Ongoing research and surveys from Brick Meets Click/Mercatus Grocery Shopping Survey showed online grocery shopping for pickup or delivery sales was $5.7 billion in August. While the latest numbers are down from June’s peak of $7.2 billion, research showed it’s five times larger than a year ago. But the research also found the average amount spent on orders was $95 — a record high.
“We continue to invest in and constantly improve our e-commerce capabilities, focusing on cost-effective solutions,” said Robert Clark, Kroger’s senior vice president of supply chain, manufacturing and sourcing, in a news release. “In Michigan, we are engineering a smaller model for the region, leveraging advanced robotics technology and creative solutions to redefine the customer experience and respond to the growing demand for grocery e-commerce services.”
Luke Jensen, CEO of Ocado Solutions, said the partnership will provide a “game-changing ecosystem for serving online grocery across the United States.”
“Ocado’s proven technology will allow Kroger to achieve the lowest cost-to-serve in the market, combined with the best freshness, accuracy and service,” Jensen said.
Wayne County Executive Warren Evans said Kroger’s decision to invest $95 million in the new facility “demonstrates that Wayne County is a global leader in logistics and fulfillment industries.
“Kroger’s continued commitment to our region with the innovative new grocery delivery service provided by this high-tech facility will help improve access to fresh foods in southeast Michigan at a time when this service is more important than ever to keep residents safe and healthy,” Evans said.
The aerotropolis area arm is made up of four communities around Detroit Metropolitan and Willow Run Airports: Taylor, Romulus, Van Buren Township and Huron Township The partnership also includes Wayne and Washtenaw counties.
Chris Girdwood, executive of the Detroit Region Aerotropolis, said the new Kroger facility, located on 22 acres, is what the area is intended for.
“That’s exactly what we wanted it to do is create jobs that support both airports,” he said.
Contact food writer Susan Selasky at: 313-378-6373 or [email protected] Follow @SusanMariecooks on Twitter.
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