Kroger to Close Three Fulfillment Centers, Resulting in Over 1,000 Layoffs

Despite these closures, Kroger plans to expand its e-commerce operations, maintaining five centers and opening new ones in Charlotte and Phoenix by 2026, as part of its strategy to enha… Kroger to Close Three Fulfillment Centers, Resulting in Over 1,000 Layoffs Kroger has announced the closure of three automated fulfillment centers located in Wisconsin, Maryland, and Florida.

Kroger has announced the closure of three automated fulfillment centers located in Wisconsin, Maryland, and Florida. This decision is expected to result in over 1,000 layoffs. The affected centers are situated in Groveland, Florida; Pleasant Prairie, Wisconsin; and Frederick, Maryland. The company has communicated that these centers are expected to close by January 2026, with the cessation of Kroger Delivery services following on February 1, 2026. The last delivery orders will be accepted by January 31, 2026.

Impact on Employees and Services

The impending shutdown of these fulfillment centers marks a significant change in Kroger's operational strategy, affecting a considerable number of employees and customers. Over 1,000 employees will be impacted by the closure, as the company moves to suspend its delivery services in the affected areas, including Orlando. Notices have been sent to users informing them of the upcoming service suspension.

This decision comes amidst a backdrop of significant changes within the company's operations. In the past 18 months, Kroger has closed 60 stores, signaling a shift in focus towards optimizing its resources and enhancing profitability through its e-commerce strategy.

Kroger's E-commerce Strategy and Partnerships

Despite these closures, Kroger continues to expand its e-commerce capabilities and partnerships. The company has announced that five of its fulfillment centers will remain operational. Kroger's partnership with the Ocado Group has been instrumental in establishing its network of customer fulfillment centers (CFCs), with eight such centers currently in operation across locations including Cincinnati, Groveland, Atlanta, and Dallas.

As of 2022, Kroger has been delivering groceries to tens of millions of families across multiple U.S. cities. The company has experienced five consecutive quarters of double-digit growth in its e-commerce segment, and it aims to enhance profitability through its digital strategy under the leadership of Yael Cosset, the chief digital officer of the eCommerce unit.

Future Plans and New Developments

Looking ahead, Kroger plans to open new CFCs in Charlotte and Phoenix by 2026, as part of its goal to establish 20 such centers nationwide. The Groveland CFC, which is among those slated for closure, occupies a substantial 375,000 square feet and was opened in 2021 as part of this broader expansion strategy.

Kroger's collaboration with Instacart and DoorDash has been expanded, with the company utilizing Instacart's AI Assistant to enhance its delivery services. These partnerships are pivotal as Kroger adapts to the evolving retail landscape and consumer preferences.

Conclusion

The closure of the three fulfillment centers represents a significant shift in Kroger's operational strategy, with a focus on enhancing its e-commerce capabilities and optimizing its resources. While the layoffs and service suspensions are challenging, the company's continued investment in its digital strategy and fulfillment center network suggests a commitment to adapting to the changing market demands.