PLEASANT PRAIRE, Wis. — All 211 employees at Kroger’s automated fulfillment center in Pleasant Prairie, Wisconsin, will lose their jobs by Feb. 1.
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Kroger announced Tuesday that it is closing three automated fulfillment centers as part of an effort to make its delivery operations faster and more profitable.
The company said it will close the facility in Pleasant Prairie, along with centers in Frederick, Maryland, and Groveland, Florida. Kroger said it will monitor results at its five remaining automated fulfillment centers.
According to a notice Kroger filed with the state of Wisconsin, the Pleasant Prairie facility will begin winding down delivery operations in January and will close permanently by Feb. 1. All employees will continue to receive regular pay and benefits through Feb. 1.
“We are taking decisive action to make shopping easier, offer faster delivery times, provide more options to our customers, and we expect to deliver profitable sales growth as a result,” Kroger Chairman and CEO Ron Sargent said in a statement.
Kroger partnered with British grocery-technology company Ocado Group in 2018 to build warehouses where robots pick and pack grocery delivery orders. Kroger and Ocado originally planned 20 locations, but have built only eight so far.
In a September conference call with investors, Sargent said that in most markets it makes more sense to fulfill delivery orders from stores rather than centralized warehouses. He noted Kroger can deliver orders in less than two hours from 97% of its roughly 2,700 U.S. stores.
Sargent added that automated fulfillment facilities are producing better results in some high-density areas with strong delivery demand.
Kroger is also relying more on third-party delivery partners such as DoorDash, Instacart and Uber Eats.
The Associated Press contributed to this report.
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