Kroger will stop offering grocery delivery in certain Texas and Florida locations beginning in May, it confirmed. The retailer announced the change in an email to customers, stating that the Austin, Texas, San Antonio, Texas, and South Florida metro areas will be impacted. Consumers can still place orders through May 25, the last day the fulfillment centers will operate.

“Kroger’s commitment to innovation means that we test and learn quickly to identify the most effective ways to deliver fresh, affordable food to our customers,” a spokesperson told Digital Commerce 360 in an emailed statement. “Despite our best efforts, including the support from new customers, learnings from other locations and the incredible work of our associates, these facilities did not meet the benchmarks we set for success. We want to express our deepest gratitude to our associates for their hard work and are committed to providing support and resources to them during this transition.”

Employees at the delivery centers will be laid off. According to Worker Adjustment and Retraining Notification Act (WARN) notices, layoffs will impact 52 Texas employees and 109 Florida employees. The retailer said it would offer relocation assistance for employees interested in moving to a different area of the company.

Kroger ranks No. 6 in the Top 1000, Digital Commerce 360’s database of North America’s leading retailers by online sales. Furthermore, Kroger is first in the Top 1000’s Food/Beverage category.

Kroger’s delivery background in Florida and Texas

The grocery retailer fulfilled orders in Miami, San Antonio, and Austin, but it does not operate any stores in those areas. 

Kroger announced that it opened a 60,000-square-foot automated fulfillment center in Opa-locka, Florida, in early 2023 to support ecommerce deliveries in South Florida. That followed investments from Kroger in other fulfillment centers in areas it didn’t have physical locations, including a 350,000-square-foot fulfillment center in Dallas — serving Austin, San Antonio and Oklahoma City  — which opened in 2023.

The three closures will not impact Kroger’s other automated fulfillment centers, the spokesperson said. “Kroger remains committed to growing its e-commerce offerings, delivering fresh food to more communities across the U.S.,” the statement continued.

Kroger’s ecommerce growth

The online grocery retailer has reported digital sales growth for several quarters in a row. Most recently, in its fourth fiscal quarter of 2023 ended Feb. 3, Kroger digital sales grew more than 10% year over year. Digital engaged households grew 18%, Kroger said. 

For the full 2023 fiscal year, digital sales grew 12%. Delivery sales increased 24% year over year.

“Digital is an important growth accelerator in our business,” CEO Rodney McMullen told investors. “And in 2024, we expect to deliver another year of double-digit sales growth.”

Kroger Albertsons merger

Kroger is also in the middle of a regulatory battle to merge with Albertsons. The Federal Trade Commission (FTC) is suing to block Kroger’s proposed $24.6 billion acquisition of Albertsons, calling the deal “anticompetitive.”

The two grocery retailers first proposed the deal in 2022. Kroger was slated to buy Albertsons at the time, pending regulatory approval. The merger would allow the chains to create a “premier omnichannel food retailer,” Kroger said in a statement at the time. Together, the retailers would operate more than 5,000 stores across 48 states, with nearly 700,000 employees.

Nine Attorneys General offices are also joining the complaint against the grocery retailers. They are:

• Arizona
• California
• The District of Columbia
• Illinois
• Maryland
• Nevada
• New Mexico
• Oregon
• Wyoming

Albertsons ranks No. 24 in the Top 1000.

Do you rank in our databases?

Submit your data and we’ll see where you fit in our next ranking update.