Grocery Chain to Close Fulfillment Centers Amid Delivery Model Shift

The Manassas facility, which spans 82,000 square feet, is equipped with the latest batch-picking software, allowing for efficient order processing. Kroger will shut down centers in multiple states, including Tennessee, impacting over 100 jobs in Nashville. The Nashville facility is scheduled to close in February 2026, resulting in over 100 expected layoffs in the area.

Amid a strategic shift in its delivery model, two grocery chains are closing a number of fulfillment centers across the United States. This move marks a significant transition towards utilizing in-store employees and third-party delivery services to fulfill customer orders.

Giant Food Announces Closure of Two Fulfillment Centers

Giant Food, a prominent grocery chain, has announced the closure of two of its fulfillment centers as part of a broader restructuring of its delivery operations. The facilities located in Hanover, Maryland, and Milford, Delaware, are slated for closure. Despite these closures, the fulfillment center in Manassas, Virginia, will remain operational. The Manassas facility, which spans 82,000 square feet, is equipped with the latest batch-picking software, allowing for efficient order processing.

This decision aligns with Giant Food's new delivery model, which focuses on using in-store employees to handle the fulfillment of orders. By leveraging existing store staff, the company aims to streamline operations and potentially reduce costs associated with running separate fulfillment centers.

Kroger to Cease Operations at Multiple Fulfillment Centers

In a related development, Kroger, another major player in the grocery industry, has also announced the closure of several fulfillment centers, including one in Nashville, Tennessee. The Nashville facility is scheduled to close in February 2026, resulting in over 100 expected layoffs in the area. This closure is part of a nationwide termination of Kroger's Blue Truck Delivery service, which will cease operations on January 7.

In addition to the Nashville center, Kroger has detailed plans to shut down fulfillment centers in Wisconsin, Florida, Oklahoma, and Maryland. The grocery giant has shifted its focus towards in-store fulfillment and third-party delivery services, citing the need for faster delivery options and improved service capabilities.

Transition to Third-Party Delivery Services

As part of their transition strategy, both Giant Food and Kroger are increasingly relying on third-party delivery services to meet customer demand. Instacart has emerged as the primary delivery agent for Kroger, while the company's products are also available on the DoorDash Marketplace. Additionally, Kroger plans to integrate with the Uber Marketplace by early 2026, further expanding its delivery network.

This strategic pivot towards third-party delivery services reflects a broader trend within the grocery industry, as companies seek to enhance their delivery capabilities without the overhead associated with maintaining proprietary delivery fleets.

Regulatory Compliance and Workforce Implications

In compliance with regulatory requirements, Kroger has filed a Worker Adjustment and Retraining Notification (WARN) notice with state officials, formally notifying them of the impending layoffs associated with the Nashville fulfillment center closure. This step ensures that affected employees receive the necessary support and resources to transition to new employment opportunities.

The closure of these fulfillment centers signifies a considerable shift in the operational strategies of both Giant Food and Kroger. As these companies adapt to evolving market dynamics and consumer preferences, the focus on utilizing in-store resources and third-party services may redefine the landscape of grocery delivery in the coming years.