A new service from The Kroger Co. turns up the competitive heat on Amazon, Walmart and online grocery delivery providers like Instacart and Shipt.
The Cincinnati-based supermarket giant has introduced Kroger Ship, a direct-to-customer e-commerce platform that enables consumers to order from a selection of groceries at ship.kroger.com and have them delivered to their door.
Kroger is beta-launching Ship in four markets: Cincinnati; Houston; Louisville, Ky.; and Nashville, Tenn. During the initial phase of the rollout, Kroger said, customers can shop from a curated assortment of 4,500 Kroger own-brand products as well as more than 50,000 center store groceries and household essentials. The company noted that it tailored the product selection using data and insights from its 84.51° digital intelligence arm.
Home delivery via Kroger Ship, made by a package carrier, is free for orders over $35 and carries a $4.99 fee for smaller orders.
Kroger also announced an exclusive U.S. partnership with U.K.-based online supermarket Ocado. The companies plan to build three automated e-commerce warehouses this year and identify up to 20 possible sites for the facilities over the first three years of their agreement.
Why are we talking about this?
Because, Kroger, now has the ability to be a direct competitor of other restaurants. How, you may ask? Kroger has been selling ready-made food for years. Customers now have the ability to order that food and have it delivered to their door. And, starting earlier this year, due to the Blue Apron craze, Kroger developed Prep + Pared boxes; which consist of prepped ingredients and step-by-step instructions on how to make the desired dish you purchased, like Fish Tacos, Lemon Chicken or Chimichurri Steak. As the delivery pilot expands, those options become more readily available to customers across the country. And that means competition for restaurants.
This is not a ‘sky is falling’ kind of moment and it is not happening as we speak. Let’s just be clear about that. However, it is important that restaurant owners and operators be informed about potential threats and competition to their businesses. Last year, we produced an article about the SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) and how this basic business tool can help your business. As the delivery pilot expands and matures, we would start putting Kroger in the ‘Threat’ category. Sure, it is not an immediate problem, but it is important to us that our readers be informed and ready for the future. The more you are ahead of the curve, the better your business will be.