Walmart, Kroger Choose Locations for New Fulfillment Facilities in 2022
Walmart and Kroger both announced expansions of their fulfillment prowess this month, aimed at meeting growing e-commerce demand.
Walmart plans to open a new 1.8M-square-foot fulfillment center in Shippensburg, PA, this Spring. The Kroger Co. will add three spoke facilities in Austin and San Antonio, TX, and Birmingham, AL, powered by the Kroger Fulfillment Network and Ocado Group. All three are expected to be become operational later this year.
Walmart’s fulfillment center is expected to create up to 600 permanent supply chain jobs in the southern Pennsylvania region, while each one of Kroger’s new spoke facilities should create up to 161 job opportunities.
Walmart’s Shippensburg, PA, Fulfillment Center
“We are proud to open a new state-of-the-art fulfillment center in Shippensburg, which will be instrumental in providing our customers with increased access and faster shipping on millions of every-day low priced items,” said Steve Miller, SVP supply chain operations, Walmart U.S. “In addition to faster shipping, our investment in Shippensburg will bring a positive impact to the community by bringing even more employment opportunities to a growing local economy.”
The new Shippensburg facility will be located at 2281 United Drive and is part of a broader initiative to add more capacity into Walmart’s supply chain as the retailer prepares for growth. Unlike distribution centers, which are focused on receiving, storing, and distributing product to Walmart stores, Walmart fulfillment centers are focused on storing millions of items that are picked, packed and shipped directly to customers as soon as next-day.
[See also: Target Invests in Sortation Centers as Part of Its Strong Supply Chain Strategy]
The Shippensburg fulfillment center is hiring a variety of full-time positions, including the following leadership positions: Assistant General Manager, Human Resources Manager and Operations Managers. Candidates can search for open positions and complete applications online at careers.walmart.com.
Kroger’s Spoke Facilities in Austin and San Antonio, TX and Birmingham, AL
The 70,000-square-foot spoke facility in northeast Austin, TX, pending finalization of lease negotiation, will collaborate with the hub in Dallas, TX, serving as a last-mile cross-dock location that efficiently expands Kroger's grocery delivery services. The 67,000-square-foot spoke facility in northeast San Antonio, pending finalization of lease negotiation, will also collaborate with the hub in Dallas, TX.
The 50,000-square-foot spoke facility, located at 30 West Oxmoor Road in Birmingham, AL, will collaborate with the hub in Forest Park, GA (Atlanta).
Kroger’s announced expansion represents an extension of a partnership between Kroger and Ocado. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics, and automation. Through the hub-and-spoke delivery network, the organization now serves customers in Florida, as an example, without traditional brick-and-mortar stores.
The delivery network relies on highly automated fulfillment centers. At the hub sites, more than 1,000 bots whizz around giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.
As customers' orders near their delivery times, the bots retrieve products from The Hive and are presented at pick stations for items to be sorted for delivery, a process governed by algorithms that ensures items are intelligently packed. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the lowest number of bags, reducing plastic use.
After being packed, groceries are loaded into a refrigerated delivery van, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, considering factors like road conditions and optimal fuel efficiency. Drivers may travel up to 90 miles with orders from facilities to make deliveries.
Kroger anticipates opening 17 new facilities, including hubs and spokes, within the next 24 months.
"I'm incredibly excited for the future of Kroger, and both thriving physical stores and digital solutions are part of it,” said Rodney McMullen, Kroger's chairman and CEO. “We continue to feel great about the momentum we're experiencing with Kroger Delivery and our partnership with Ocado, supporting Kroger in strategically leveraging our unique assets to expand in existing regions, including Atlanta, Cincinnati and Dallas, as well as enter into new geographies like Austin, Birmingham, Cleveland, Oklahoma City, Orlando, San Antonio, South Florida, and the Northeast through a flexible network of differently sized, high-tech facilities operated by friendly and knowledgeable associates.”