Cincinnati-based grocery chain, Kroger, has announced the closure of three spoke facilities in its Texas and Florida e-commerce operations. The facilities, located in Austin, San Antonio, and Miami, will cease operations at the end of May, according to a spokesperson from Kroger.

The decision to close these cross-docking facilities comes as Kroger evaluates its e-commerce operations and strives to meet set benchmarks for success. Despite efforts to attract new customers and leverage learnings from other locations, the facilities did not meet the expected standards.

Kroger remains committed to expanding its e-commerce offerings and delivering fresh food to more communities across the United States. These spoke facilities, in collaboration with British online retailer Ocado, play a crucial role in extending Kroger's network. Ocado's larger automated facilities assemble orders, which are then transferred to the spokes and loaded into smaller delivery trucks for final shipment.

While competition in the e-commerce sector has intensified, especially during the pandemic era, Kroger and Ocado have continuously expanded their partnership over the years. This growth includes the construction of additional fulfillment centers and the development of in-store order capabilities.

The Austin and San Antonio spoke facilities have been receiving orders from a larger automated shed in Dallas, which has been in operation since 2022. Similarly, the Miami spoke was being catered to by a regional shed in Groveland, Florida, which opened in June 2021. Notably, both the Dallas and Groveland facilities will continue to operate unaffected by the spoke closures.

Kroger's spokesperson assured that the closure of the spoke facilities will not impact other cross-docking locations or the larger facilities. The company has been actively aiming for expansion and growth as evidenced by its financial performance. In 2023, Kroger reported earnings of $2.96 per share and total company sales amounting to $150 billion. This represents an increase from the previous year's earnings of $2.76 per share and $148.3 billion in revenue.

Apart from the spoke closures, Kroger has also made headlines recently due to a potential merger with Albertsons. The two grocery giants, among the largest in the United States, had hoped to finalize a $24.6 billion deal this year. However, legal challenges surrounding the merger have cast doubt on its likelihood in the near future.

With its focus on growing its e-commerce operations and delivering fresh food to more communities, Kroger aims to navigate through the challenges posed by the rapidly evolving grocery industry.