Kroger to Close Robot Fulfillment Sites, Takes $2.6B Charge and $350M Settlement
Kroger will shut down multiple Ocado-powered automated fulfillment sites and record a $2.6 billion charge related to the robot warehouse network. The company will also pay a one-time $350 million settlement to Ocado as it restructures its grocery delivery operations.
1. Ocado Partnership and Objectives
In 2018, Kroger partnered with UK-based Ocado to deploy its hive-style automated warehouses across the U.S., aiming to revolutionize grocery delivery with robotics and streamline order fulfillment.
2. Closure of Automated Fulfillment Centers
By late 2025, Kroger will shut down multiple Ocado-powered facilities, including the Frederick, MD center, after U.S. geography and delivery expectations proved incompatible with the network’s economics.
3. $2.6B Write-Down and Financial Impact
The company will record a $2.6 billion charge related to decommissioning the automated network, significantly impacting Kroger’s quarterly earnings and balance sheet.
4. $350M Settlement and Operational Refocus
Kroger has agreed to a one-time $350 million settlement payment to Ocado and plans to reoptimize its delivery strategy using a blend of automation and traditional logistics.