Kroger announces major update on new ‘zero compromise’ store policy impacting millions of customers across the US

KROGER has long prided itself on putting the customer first.

Now the grocery giant has announced a major update on its “zero compromise” store policy to personalize shopping experiences for millions of customers. 

Since 2018, Kroger has been working to announce and open 20 automated customer fulfillment centers (CFCs) to increase sales in online grocery shopping while using robotics and AI to facilitate food deliveries.

To build these high-tech centers, Kroger teamed up with British online-grocery giant Ocado. 

Specifically, the two companies are combining vertical integration, machine learning, and robotics to provide this affordable, fast and fresh food deliveries to millions of customers. 

Vertical integration is the combination of a company taking control of one or more steps in a production process or supply chain. In the case of Kroger, this is seen through the supplying of the warehouses, trucks, and packaging for the deliveries.

As of August 2022, Kroger has announced 17 CFC locations – with six already being open, according to Supermarket News.

The first opened earlier this year and is located in Monroe, Ohio – just north of Cincinnati. 

There, more than 1,000 robots transport products around the facility after orders are received. Certain stations pack and sort the items before they are delivered in a temperature controlled van, Supermarket News reported.

At the time of the facility’s opening, Kroger told the outlet that the CFC can handle thousands of delivery orders daily as well as pickup options. 

Kroger Chairman and CEO Rodney McMullen has since touted this fresh model, telling Supermarket News that it caters to what “the customer really wants and needs.”

“When customers engage with us, we think it’s really important. We call it ‘zero compromise.’ Customers should never have to compromise an experience, and that’s everything from how easy is it, fair and reasonable prices, using our data to personalize the experience and making sure the product is incredibly fresh,” McMullen said. 

“When you look at our [Ocado] sheds, that’s part of the seamless system, and it facilitates that overall connection with the customer in all those dimensions. It also makes it incredibly easy to be consistent with the experience for the customer.”

“One of the things I think is important relative to some of our competitors is that the consistency of our seamless [digital] experiences are the same consistency that you would have when you go into the stores every day.”

McMullen has described the CFC model as a “seamless ecosystem” that facilitates deliveries to customers “anytime, anywhere and with zero compromise.” 

“During the first quarter, more customers returned to in-store shopping and, as a result, we made strides to enhance that experience while introducing new tools that help our associates better serve customers,” McMullen said.

“In pickup, we unveiled new technology that improved wait times 20% and expanded capacity based on customer needs. In delivery, we continue to introduce key initiatives that expand our reach and shorten delivery times.

"We strive to provide more customers access to high-quality affordable food, regardless of whether they have a physical store in their community.”

Kroger’s zero-compromise approach through the CFCs comes as the grocery story giant – along with Walmart and Target – have been making a larger shift online retail.