Kroger, Ocado Select Maryland for New High-Tech Fulfillment Center
Grocery partnership will create hundreds of new jobs at Frederick County facility
ANNAPOLIS, MD—The Kroger Co., the nation’s largest grocery retailer, has announced plans to construct a 350,000 square-foot robotic Customer Fulfillment Center (CFC) in Frederick County. Kroger is partnering with Ocado, one of the world’s largest online grocery retailers, which will provide and maintain the digital and robotic equipment used at the facility. Together, the companies will automate the customer fulfillment center – also known as the “shed.”
The project, which will include construction to a preexisting distribution facility at 7106 Geoffrey Way, will serve the region and position the company for future growth. This new center will accelerate Kroger’s ability to expand its products to a larger footprint. Upon completion, 400 new jobs will be created with up to 100 more added later as the service areas of this facility expand.
“Kroger is incredibly excited to construct one of our industry-leading Customer Fulfillment Centers in Maryland in relationship with Ocado to bring fresh food to our customers faster than ever before,” said Robert Clark, Kroger’s senior vice president of supply chain, manufacturing and sourcing. “Through our strategic partnership, we are engineering a model for the region, leveraging advanced robotics technology and creative solutions to redefine the customer experience.”
“We are excited to bring Kroger and Ocado’s latest automated warehouse to Frederick. This site will be key to delivering amazing grocery experiences to households across Maryland, Pennsylvania and the District of Columbia. It will also create fantastic job opportunities for engineers looking to work alongside state-of-the-art robotics and automation,” said Luke Jensen, CEO of Ocado Solutions. “The warehouse will be a key component of the seamless fulfilment ecosystem that Kroger is developing for customers across the United States. Ocado’s proven technology will allow Kroger to achieve the lowest cost-to-serve in the market, combined with the best freshness, accuracy and service.”
The automated facility will be equipped with robots that move along the top of a grid system, selecting grocery filled crates that are later sorted and assembled into orders. The shed will allow Kroger to tackle the online market, providing automatic fulfillment and home delivery to customers throughout the East Coast. The Maryland site confirms an earlier announcement identifying the Mid-Atlantic region as one of the first shed locations.
“We are thrilled that these two respected companies have chosen Maryland as the location for a new high-tech, innovative Mid-Atlantic hub,” said Governor Larry Hogan. “This is a big win for Frederick County and yet another shining example that Maryland truly is open for business.”
For more than 130 years, Kroger has served the needs of grocery shoppers throughout the country. The company currently operates nearly 2,800 stores in 35 states, including the chains Fred Meyer, Metro Market, Ralphs, and Pick’n Save, among others, with annual sales exceeding $120 billion. As one of the largest retailers across the globe, Kroger is leading by example by focusing on ending hunger in its communities and eliminating waste across the company by 2025 through its Zero Hunger | Zero Waste social impact program.
Ocado was founded almost 20 years ago as an online-only grocer in the United Kingdom. Its retail business now has over 721,000 active customers across the UK, with orders fulfilled through Ocado’s highly automated, centralized fulfilment centers and delivered to customers’ homes. Ocado has also partnered with Kroger and other leading global retailers, bringing the benefits of its unique technology and online grocery expertise to their ecommerce operations across eight countries worldwide.
“Being selected for one of Kroger and Ocado’s automated customer fulfillment centers is exciting not only for the Frederick County community, but for the entire state,” said Maryland Commerce Secretary Kelly M. Schulz. “By operating in Maryland, our centralized location will provide this grocery partnership with convenient access to several highways and access to thousands of customers across the East Coast.”
To assist with project costs, the Maryland Department of Commerce has approved a $2 million conditional loan through Advantage Maryland, formerly the Maryland Economic Development Assistance Authority and Fund (MEDAAF). Additionally, Frederick County has agreed to provide up to $150,000 in permit fees, and the project is eligible for an estimated $5 million in county commercial and industrial tax credits over the next ten years. The companies are also eligible for local workforce services and state tax credits, including Maryland’s Job Creation Tax Credit.
“This is excellent news for Frederick County,” said Frederick County Executive Jan Gardner. “We are thrilled to welcome Kroger and Ocado. Their high-tech innovative business will bring life to a vacant distribution facility, will add hundreds of new jobs, and make an investment of tens of millions of dollars in our community.”