Kroger’s new Dallas robot-operated online grocery warehouse designed to grab market share

While H-E-B’s expansion into the Dallas-Fort Worth area later this year is being widely anticipated, there’s a potentially big market-moving launch coming from Kroger. Kroger, the No. 2 market share grocer in D-FW behind Walmart, is shoring up its local online grocery delivery business with three levels of service: 30-minute quick purchases and two-hour deliveries, both through Instacart, and next-day, stock-up or weekly online orders filled from an automated warehouse and delivered by Kroger employees. Sometime this spring, Kroger will begin operating its automated online grocery facility in Dallas that will be able to process 18,000 orders a day to serve customers throughout North Texas and into Oklahoma, said Bill Bennett, Kroger’s vice president for e-commerce.

The 350,000-square-foot facility has been under construction with Kroger’s technology partner and U.K.-based online grocer Ocado for the last two years. It’s on a 55-acre parcel just south of Interstate 20 at the corner of Cleveland and Telephone roads. Last week, Kroger said it would expand its reach to Oklahoma City — where it has no stores — with an online-only shopping offer when the Dallas facility opens. The warehouse is hiring drivers and warehouse workers now. It will take 400 people in Dallas to run the operation while robots pick and pack the groceries. Workers unload groceries coming into the warehouse, unpack them and put items into totes. The robots take the totes to temperature-controlled “hives” for storage, Bennett said. The robots know to pick groceries in the optimal order, he said. “If you order both Campbell soup and bread, it will pick the soup first so the bread isn’t squashed.”