(Reuters) -Kroger will close three automated delivery fulfillment facilities and record an impairment charge of about $2.6 billion in its third quarter, as the U.S. grocer expands its third-party delivery partnerships. The company said on Tuesday it would shutter the centers in Wisconsin, Maryland, and Florida in January, while monitoring the rest. It expects the […]
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Kroger to close three automated delivery fulfillment sites, incur $2.6 billion charge
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(Reuters) -Kroger will close three automated delivery fulfillment facilities and record an impairment charge of about $2.6 billion in its third quarter, as the U.S. grocer expands its third-party delivery partnerships.
The company said on Tuesday it would shutter the centers in Wisconsin, Maryland, and Florida in January, while monitoring the rest. It expects the closures to have no impact on its core sales.
Kroger, meanwhile, has strengthened its partnership with online grocery and food delivery firms such as Instacart, DoorDash and UberEats, as part of its efforts to rework its e-commerce strategy.
The company also expects to improve e-commerce profitability by about $400 million in its fiscal year 2026.
Kroger had partnered with Ocado in 2018 to deploy the British online supermarket and technology group’s Smart Platform for automated fulfillment centers.
Ocado said it would receive over $250 million in compensation following the closure of the three jointly operated automated fulfillment centers.
Kroger had in September signaled a potential retreat from investment in automated warehouses when it said it was conducting a “site-by-site” review of the fulfillment network it had built in partnership with Ocado.
The two companies will continue to operate the remaining five sites.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila)