Closure of Automated Fulfillment Centers Affects Jobs Across Three States

E-commerce Growth and Challenges Kroger's e-commerce sales increased by 16% in the second quarter, marking five consecutive quarters of double-digit growth. Kroger will close three automated fulfillment centers in Wisconsin, Maryland, and Florida by February 1, 2026, resulting in 1,596 job cuts, including 450 customer service delivery drivers. In Pleasant Prairie, Wisconsin, 211 positions will be cut.

Kroger has announced the planned closure of three automated fulfillment centers located in Wisconsin, Maryland, and Florida, with the shutdown scheduled for January 2026. This decision will significantly impact the workforce, resulting in the elimination of numerous jobs across these facilities.

Impact on Employment

The closures will lead to substantial job losses in the affected areas. In Pleasant Prairie, Wisconsin, 211 positions will be cut. Meanwhile, the Groveland, Florida facility will see a reduction of 935 jobs. Additionally, 450 customer service delivery drivers will be laid off, contributing to a total of 468 jobs lost across the three fulfillment centers. The facilities are set to close officially on February 1.

Strategic Business Adjustments

Despite the current unprofitability of Kroger's e-commerce operations, the company has experienced digital sales growth that surpasses its same-store sales growth. This strategic move to close certain fulfillment centers aims to enhance delivery services and streamline operations. Kroger has been working in partnership with Ocado since 2018 to advance its technological capabilities in the grocery sector.

Facility Background and Future Plans

The affected fulfillment centers have been relatively new additions to Kroger's operational infrastructure. The Groveland facility commenced operations in June 2021, followed by the Pleasant Prairie center in June 2022, and the Frederick, Maryland location in June 2023. Despite these closures, Kroger plans to open two new customer fulfillment centers in Charlotte, North Carolina, and Phoenix, Arizona, during fiscal 2026. Additionally, the company intends to pilot store-based automation to continue enhancing its service capabilities.

E-commerce Growth and Challenges

Kroger's e-commerce sales increased by 16% in the second quarter, marking five consecutive quarters of double-digit growth. The company continues to face challenges in making its digital operations profitable. The decision to close these fulfillment centers is part of a broader strategy to improve efficiency and delivery performance while exploring new technological innovations in the grocery retail space.

Kroger's adjustments reflect a strategic response to the evolving landscape of grocery retail, aiming to better align its operations with current market demands and technological advancements.