Kroger to close 3 automated fulfillment facilities across multiple US states

Kroger announced Nov. 18 that it will close three automated fulfillment centers across three states, citing an effort to improve delivery services.

The grocery giant said in a news release that it will shutter the centers in Pleasant Prairie, Wisconsin, Frederick, Maryland, and Groveland, Florida, in January. The company added that it will monitor the performance of the remaining centers it operates with British online supermarket and technology group Ocado.

“We are taking decisive action to make shopping easier, offer faster delivery times, provide more options to our customers, and we expect to deliver profitable sales growth as a result,” Ron Sargent, Kroger Chairman and CEO, said in the release.

Kroger expects the closures to have no impact on its core sales and claims it will increase its e-commerce operating profit of about $400 million in 2026. The company stated that it has strengthened partnerships with online grocery and food delivery firms, including Instacart, DoorDash, and Uber Eats, as part of its efforts to rework its e-commerce strategy.

“eCommerce remains a core part of serving customers who want better value,” Sargent said.

A layoff notice filed in Wisconsin, updated in the USA TODAY WARN Tracker, shows that 211 jobs will be slashed at the Pleasant Prairie facility.

The closure of the Groveland facility would result in 935 jobs being cut, according to Florida’s WARN notice page. Over 450 of those being laid off are classified as “customer service delivery driver,” according to the notice.

Fulfillment centers connected to the Groveland facility in Florida are also set to close, the Jacksonville Times-Union, part of the USA TODAY Network, reported. WARN notices for those facilities indicate that 468 jobs will be cut across three locations.

A WARN Notice for the Maryland facility has not been posted as of Nov. 18. The facilities will close Feb. 1, according to the WARN notices.

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Kroger partnered with Ocado in 2018 to deploy the company’s Smart Platform for automated fulfillment centers.

Ocado stated that it would receive over $250 million in compensation following the closures and expects an impact of about $50 million in fiscal year 2026. Kroger said that it will incur about $2.6 billion in impairment and other related charges associated with the closures in the third quarter of 2025.

In September, the company signaled a potential retreat from its investment in automated warehouses when it announced a “site-by-site” review of the fulfillment network it built with Ocado.

“The pandemic bump didn’t hold, and shoppers moved back to stores quickly, so the economics of running dedicated ecommerce facilities may no longer make sense,” eMarketer analyst Suzy Davidkhanian told Reuters, adding Kroger’s partnerships with the online platforms provide it more reach among consumers. “In this environment, partnering (with delivery companies) rather than fulfilling (orders) in-house is the more efficient path forward.”

Both companies will operate the remaining five sites in Ohio, Texas, Georgia, Colorado, and Michigan, Ocado added.

Kroger, based in Ohio, employs 409,000 workers nationwide, The Cincinnati Enquirer, part of the USA TODAY Network, reported in September.

Contributing: Reuters

This article originally appeared on USA TODAY: Kroger closes delivery facilities in Wisconsin, Florida, and Maryland