The top executive of one of the largest grocers in the country, The Kroger CEO Rodney McMullen, says he's 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 says. “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 at the official ribbon cutting of the grocer's 375,000-square-foot fulfillment center in Groveland July 29, 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 says company research found that more than 50% of Floridians were familiar with the company, either because they’d shopped at a Kroger store themselves 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 says, is Kroger sees an opportunity, especially since the pandemic changed many shoppers’ habits and that its e-commerce initiatives in recent years have been successful.
He believes the company is poised to capture a large chunk of the grocery market looking for delivery because of its 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 so as not to sacrifice either.
“We’ve got to give a great customer experience, and that will drive our ability to expand,” he says, adding that “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 adds 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, which blitzed Florida with more than a dozen stores starting in 2016 through an investment from Kroger, filed for bankruptcy last year.
The Groveland facility, built in an office park just west of Orlando in the Lake County city, opened earlier 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, state-of-the-art distribution center is basically a massive grocery store, complete with separate sections for perishables, non-perishables and frozen foods. Rather than being packed with shoppers, the shed, as it’s known, is manned by both employees and robots who prepare grocery orders for customers.
“We’ve got to give a great customer experience, and that will drive our ability to expand." — Rodney McMullen, Kroger chair and CEO
On the shed’s 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 all a shopper’s items are picked and combined, grocery bags are placed either 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 customers front door using bar codes.