The Cincinnati-based grocer will ask the Dallas City Council on Wednesday for $5.7 million: 10-year and five-year property and business personal property tax abatements totaling $3.7 million, and $2 million from 2012 bond money designated for economic development in southern Dallas, according to the city’s meeting agenda.
Kroger confirmed with the Dallas News that it is working with the Dallas city council on the approval process.
Kroger has plans to build 20 of these automated fulfillment centers, or “sheds” as the grocer calls them, and Dallas would be the fifth announced location, joining, Monroe, OH, Groveland, FL, Forest Park, GA and one unspecified in the Mid-Atlantic region.
These smart warehouses use technology from UK-based Ocado (in which Kroger is an investor) and combine robots and logistical software to automate fulfillment of online grocery orders. The automated system uses a series of totes on rails to shuttle around a grid system, picking up items and assembling them for orders.
Though the vast majority of Americans have still never bought their groceries online, the number of people who do is steadily growing, and retailers like Kroger are building out the infrastructure now for when it (eventually) becomes mainstream. Kroger, in particular is investing in an online ordering future, as my colleague, Jenn Marston wrote about Kroger’s Q1 earnings report in June:
[Kroger’s] digital sales grew 42 percent over the quarter, making delivery and/or pickup options available to 93 percent of Kroger’s customers. Online grocery delivery is now available at 2,126 Kroger locations and pickup at 1,685 locations. The company plans to have those options available to “everyone in America” by the end of this year…
But Kroger rivals aren’t sitting still. Walmart is testing robotic fulfillment, launching a grocery delivery subscription service and experimenting with in-home delivery. Albertsons and Ahold Delhaize are testing their own robotic fulfillment solutions, too. Given the competition, Kroger has to push its own innovation efforts. For example, just a few hours south of Dallas, down in Houston, Kroger is experimenting with self-driving delivery vehicles.
At some point, Kroger will connect the automated warehouses with the automated vehicles for round the clock delivery to get you the groceries you want when you want them.