Kroger will stop grocery deliveries in the Miami area. What to know about the change
In a terse announcement to members, Kroger told grocery customers this week that it’s closing three of the company’s delivery centers, including one in Opa-locka that opened in June 2022.
The move ends the grocery giant’s initial foray into the South Florida market as a competitor to Florida’s market leader Publix, and also Walmart, Amazon, membership programs like Costco and BJ’s, and discount grocer Aldi, which recently absorbed Jacksonville’s Winn-Dixie.
Kroger’s Florida operations were exclusively as an online grocer with hubs in Central Florida’s Groveland, Tampa, Jacksonville, Cocoa Beach and Opa-locka’s 60,000-square-foot distribution center. These hubs, or “spokes” as Kroger calls them, delivered groceries via a fleet of blue trucks with the familiar Kroger logo.
“We do not make these decisions lightly, and we understand the impact this has on associates, customers and communities,” Kroger said in its announcement to Boost members on Tuesday. “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.”
Kroger spokeswoman Krystal Diaz reiterated the news to the Miami Herald.
“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,” she said in an email, repeating the message that “the South Florida spoke facility did not meet the benchmarks we set for success.”
MORE: Grocery giant Kroger is almost ready to deliver in Miami. How do you place an order?
Where is Kroger closing?
The shutdowns are on May 25, about two years after the South Florida site opened, marking the grocer giant’s first venture into Florida. In addition to the Miami-area delivery facility, the Austin and San Antonio “spokes” are closing in Texas.
The delivery center’s employees will also lose their jobs at the end of May, the company said. In June 2022, when Kroger announced the opening of its Opa-locka facility, the company said it expected to employ 200 there. As of Tuesday’s announcement, the South Florida delivery center employed 109, said Kroger’s E-Commerce spokeswoman April Martin.
Kroger’s other automated fulfillment centers or cross-docking spoke locations in Florida — including the Groveland Fulfillment Center and Tampa, Jacksonville and Cocoa Beach hubs — are not closing and remain operational, Diaz said. Kroger owns the Harris Teeter supermarket chain and operates a traditional store in North Florida in Fernandina Beach.
Diaz did not provide other details.
What if you are in Kroger’s membership program?
Boost members, who pay a $59 annual fee to get free grocery delivery in a 90-mile radius on orders of $35 or more will get a refund of their membership fee in the next 30 days, Kroger announced Tuesday. The refund will automatically be applied to the card members used when signing up for the Boost membership program.
The Boost membership for the South Florida and Texas delivery areas ends on May 28 for most members. For those who were scheduled to renew before that date, the membership ends on the expiration but Kroger said it will load a coupon for a free delivery to their digital account.
Market leadership
MORE: Publix is getting some new competition. And this grocer isn’t even opening a supermarket
Cincinnati-based Kroger is the nation’s top traditional grocery chain, operating more than 2,700 stores, and is second only to mass merchant Walmart in terms of grocery sales nationwide, according to trade group, Foodindustry.com.
Kroger reported $148 billion in revenue and an operating profit of $3.1 billion for fiscal year 2023. Florida’s top grocery chain, the Lakeland-based Publix, ranked No. 6 on Foodindustry’s November survey.
But those figures are nationwide. Publix operates in only eight southeastern states with most of its 1,371 stores in Florida (867) followed by Georgia (212), Alabama (90), South Carolina (69), Tennessee (58), North Carolina (54), Virginia (20) and a single new store in Kentucky.
Kroger hoped to parlay its success in California and dent Publix in its home state.
But in a Florida Grocery Report 2023, reported by Business Observer, Publix controlled 60% of the market share in South Florida with $9.4 billion in sales, far ahead of Nos. 2 and 3, Walmart and Winn-Dixie.
In Central Florida’s Orlando, Tampa and Fort Myers markets, Publix stores led with $12.9 billion in sales, more than twice Walmart’s sales of $5.8 billion.
Only in North Florida did the top two positions swap, with Walmart leading with 35% of the market share to Publix’s 27%. Kroger was not listed among the leaders that also included Sam’s Club, Whole Foods and Target.
Aldi’s acquisition of Winn-Dixie, which became official in early March, should see its share rise as the U.S. operations of the Illinois-based chain begins converting some of those 400 stores to Aldis in late 2024.
Aldi plans to invest $9 billion to open more locations nationwide over the next few years, said Aldi spokeswoman Carly Schesel Oliver in an email to the Herald in March. “We do not have any additional information to share on specific expansion plans in the South Florida region,” she said, adding that details would be announced in the coming months.
This story was originally published March 27, 2024 at 11:29 AM.
