The top executive of one of the largest grocers in the country, The Kroger Co. CEO Rodney McMullen, says he is not looking to steal business from Florida’s own supermarket king, Publix.
Kroger’s actions in the state, including recent debuts of grocery delivery in Tampa and Jacksonville, with Miami likely in the next few months, show something else.
“We don’t look at it as we’re going to go and take (Publix’s) Florida’s market share away,” McMullen said.
“We look at, here’s what we offer uniquely and we’re going to do an incredible job serving an individual customer. And then we’ll earn the business over time.”
Despite his friendly competition statements about Publix, McMullen, speaking July 29 at the official ribbon-cutting of the grocer’s 375,000-square-foot fulfillment center in Groveland, says Florida is a prime market for the grocer and he sees a bright future in the state.
One big reason is name recognition. McMullen said company research found that more than 50% of Floridians were familiar with the company, either because they had shopped at a Kroger store or visited family members who did.
The Cincinnati chain, founded in 1838, is one of the largest grocery companies in the country with more than 20 brands operating 2,800 stores in 35 states, posting $132.5 billion in sales in 2020.
That dwarfs Publix, with just under $45 billion in revenue in 2020.
The reason Kroger entered Florida with delivery rather than physical stores, McMullen said, is Kroger sees an opportunity, especially since the pandemic changed many shopping habits and that its e-commerce initiatives in recent years have been successful.
He believes Kroger is poised to capture a large chunk of the grocery delivery market because of the company’s ability to deliver the same level of service and product to a person’s door as it does at its brick-and-mortar stores.
McMullen says Kroger plans to expand in Florida slowly.
“We’ve got to give a great customer experience, and that will drive our ability to expand,” he said.
“I don’t even know when that it is because we have to be driven by how good a job we do.
“We will earn our right to continue to expand.”
He said physical stores “are not on the agenda right now.”
Kroger has had a presence in Florida before.
Lucky’s Market, an organic and natural food chain out of Colorado, blitzed Florida with more than a dozen stores starting in 2016 through an investment from Kroger.
Kroger sold its interest in Lucky’s Market before the chain filed for bankruptcy.
It also owns a Harris Teeter store in Nassau County.
The Groveland facility, built in an office park just west of Orlando in the Lake County city, opened this year and is the hub for what Kroger plans to do in the state.
Company officials believe it will allow Kroger to duplicate its service and quality offerings in a van rather than a store.
The three-floor distribution center is a giant grocery store, complete with separate sections for perishables, nonperishables and frozen foods.
Rather than being packed with shoppers, the shed, as it is known, is staffed by employees and robots who prepare grocery orders for customers.
On the second floor, pickers work to pack orders as they come in from what look like giant vending machines, separating, inspecting and bagging specific items and then shipping them down the line to the next station.
One floor above the pickers is the hive. This is a massive grid were robots swarm on tracks to pick items below them. The bots stop above the designated spot and take the items into what can best be described as their bellies. There are what seem like hundreds of these bots, shooting back and forth, picking a 50-item order in five minutes or less.
Once a shopper’s items are picked and combined, grocery bags are placed into the back of tractor-trailers or vans for local deliveries. The trucks are unloaded and reloaded unto vans for deliveries up to 90 minutes away.
Orders destined for Tampa and Jacksonville come from smaller facilities supplied by the shed.
In all, the shed operates 19.5 hours a day and can process 22,000 orders each day.
Orders are tracked from placement on the app to the customer’s front door using bar codes.