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Kroger Plans to Capture Florida Business Without Brick and Mortar Stores

11/10/2021

In a far-reaching experiment, Kroger intends to make a significant inroad into the Florida grocery market using Ocado automated fulfilment centers serving as hubs for local sub-units with company-owned delivery. Although Kroger has 2,800 stores in 35 states, there is only one Company supermarket in northern Florida.

 

It is estimated that online ordering in the U.S. accounts for 12 percent of grocery sales, up from two percent prior to COVID.  According to CNN, this translates to $8 billion out of $65 billion in grocery sales with Amazon and Walmart dominating the segment. 

 

For the Florida venture, Kroger will compete directly with Publix which uses Instacart as a third party delivery service.  According to IRI, Publix has a 37 percent share of the Florida grocery market, excluding club stores, with Walmart accounting for 26 percent.

 

Delivery service provided by Kroger adds $7 to an order or customers can opt for an annual subscription at $80.  Kroger is offering discounts for customers who sign up for an annual subscription.