The Kroger Company has chosen Austin as one of several cities to expand its e-commerce business, despite not having physical stores in Austin.
Kroger opened its first fulfillment centers in 2021 in Ohio, California, and Florida. It also works with Instacart and Shipt to deliver groceries in areas where it doesn’t have dedicated e-commerce operations.
Kroger announced March 4 that it intends to add Austin, San Antonio, and Birmingham, AL, as spoke facilities in its delivery network.
In a news release, the company said it would open a 70,000-square-foot spoke facility in northeast Austin, pending finalization of lease negotiation, which will collaborate with a hub in Dallas. The facility will create up to 161 jobs.
Similarly, in northeast San Antonio, Kroger will open a 67,000-square-foot spoke facility and create the same number of jobs.
Kroger is the third largest grocery retailer in the United States by sales, behind Walmart and Amazon/Whole Foods. As it attempts to scale up its e-commerce network, it is working with Ocado Group, a London-based technology company.
Local grocery deliver in Austin is largely dominated by H-E-B, which bought Favor in 2018 and invested massively in scaling up its delivery operations in an effort to preempt Amazon from capturing the market after it bought Whole Foods.
