Kroger acknowledges that its bet on robotics went too far

Sounds like they just put them in the wrong places.

> Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw.

> “Ultimately those were hard places to make this model work,” said Fenyo. “You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them. And so ultimately, these large centers were just not processing enough orders to pay for all that technology investment you had to make.”

I had a wonderful retro futuristic dream about an automated Costco warehouse a few weeks ago. It was one of the less weird dreams so I still remember it clearly.

Basically, each section is like a closed areas with some windows. Customers order at the computers by the windows and flash their membership cards. Robots glide left and right to move 10 samples to the customer, in an arm with rotating clips. Customers can press a button to rotate the samples, observe them, and place an order by pressing a button. Samples not chosen are temporarily stocked at the window as a “stack”.

In each closed section, there are humans who monitors and maintains the robots, and occasionally fetch samples when robots stop working (hopefully it too often, you know those 9s).

At the exit, a human worker assembles the packages and hand them to the customers with a smile. Customers have a last chance to return unwanted items.

Why was it a retro futuristic dream? Because the customers have the option to go into a bakery to enjoy a cup of coffee/tea, some cake and socialize with fellow customers. All of them looked like the men and women from advertisement from Fallout 4.

I’d like to shop or even help build one of these.

Here in the Houston areas, supermarkets like Kroger/Walmart/HEB/etc always have single floor buildings. Why can't they build multi-floor buildings for storage upstairs and retail walk-in sales on the ground floor? On the above ground floors, they can create an automated or semi-automated system for employees to gather up items for online/delivery orders.

This is a failure of business model and logistics, not a failure of the robotics.

> Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw.

They over-spent on automating low-volume FCs. You could draw comparisons to Amdahl's law, they optimised the bit that wasn't the issue, the real issue was delivery distances and times.

Ocado has had good success with the robotics approach in the UK, because the UK is very high density compared to a lot of the US. Plus Ocado put a lot of work into creating good delivery routes, whereas it sounds like that wasn't a component of the automation stack that Kroger bought.

I sometime use Ocado in the UK, and it's 'OK' but it's certainly not at the cheap end of the market. I more often use a traditional supermarkets home delivery service where it's manually picked; those supermarkets have the advantage of having very little infrastructure overhead in the picking - they mostly use their existing stores and pick at quiet times/over night. Ocado has to run entire warehouses just for this task. Ocado can only work with packed goods - not weighed vegetables for example - which the hand pickers in store can do, albeit whether they do it well is down to luck and the mood of the picker.

3 CFCs (robotics centers) closed, 5 continuing operating [1]. Initial commitment was 20 & Kroger is paying 350m$ to compensate the partner.

I don't know what success looks like but it's probably fair to say they were over-extended by roughly 30-40%.

https://chainstoreage.com/kroger-pay-350-million-automation-...

Weird headline, totally unsupported by the article.

According to the article, there were several strategic blunders, including trying the model outside of cities where lack of density cut against it. Plus the apparent dismissal any value their 2700 retail locations could provide.

As far as I can tell, Kroger didn’t acknowledge anything except a change in strategy.

Good news for blue collar workers, tough for investors. The bean-counting dream of LLM's and Robotics remains, but until ChatGPT is placing your order at Mcdonalds drive-thrus and Amazon is laying off warehouse associates en masse, i'd say that last 5% is still taking 95% of the time.

Whenn I lived in Atlanta the Krogers each had a nickname. There was disco Kroger because of its disco ball. There was murder Kroger that purportedly had been the site of a murder.

This I guess is Robo Kroger.

I remember a glowing video about this thing (by Tom Scott maybe?) and being confused how it could ever compete with humans being paid slave wages.

Guess I was right.

all it takes is one junior executive gets caught by one chinese robot saleswoman, and the next thing you know…

TIL Ocado is supposed to be an automation/robotics co.

I associate it more with delivery vans that seem to be in no particular hurry (unlike uber eats / DPD / UPS etc)

Notable that the reasons for failure to meet benchmarks was that the locations were too far away, and that they are moving to the “Micro-Fulfillment Center” approach that Amazon is doing at Whole Foods. This is exactly what everyone predicted when Amazon bought WF - turn it into a grocery FC.

That makes sense to me.

Feels like we’re going to have warehouse scale vending machines in cities, and delivery bots taking them from the warehouse-vending-machine to the customer.

this kind of stuff is still probably a few orders of magnitude too expensive per unit cost.

I'm also skeptical it'll ever work in America due to the general lack of density.

Having FCs an hour away from your customers, packing groceries into a tiny truck with one or two employees per truck, the trucks alone would never pay for themselves let alone the FCs. This was obvious from the get go and it’s why Walmart has been the only one successfully doing grocery pickup and delivery for 6 years. Every store is an FC and they’re all within 20 minutes of their customers.

Also worth mentioning Kroger just lost a multi million dollar lawsuit in Florida after one of their delivery trucks hit a cyclist. I wonder if this has anything to do with it as well.