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Kroger Partners With ClusterTruck for Meal Delivery Service

Zacks Equity Research

The Kroger Co, Inc. KR, in association with ClusterTruck, is introducing an on-demand meal delivery service namely Kroger Delivery Kitchen. Customers will get freshly prepared meals in half an hour of ordering, without shelling out a penny for delivery.

ClusterTruck operates vertically integrated delivery-only kitchens, also known as dark kitchens, which come with a software system that uses customized algorithms to optimize kitchen and delivery operations. With the help of ClusterTruck, the company will be able to offer multiple food items from one central kitchen. Additionally, ClusterTruck’s advanced technology will help Kroger provide convenient delivery to its customers.

The kitchen will be launched initially in places like Indianapolis, IN and Columbus, OH. Further, Kroger and Cluster are set to open the fourth kitchen in Carmel, IN. These apart, the facility will also be available in Denver via Kroger’s King Soopers supermarket chain. Customers can place orders online at KrogerDeliveryKitchen.com or via ClusterTruck mobile app. Similarly, those, who reside at Denver, may use KingSoopersDeliveryKitchen.com for online orders.

The recent foray into meals is not new to Kroger. The company has been gradually strengthening its position in the omnichannel food retail space. Earlier, it acquired Chicago-based meal kit provider, Home Chef. Kroger is steadily introducing Home Chef retail meal solutions, comprising oven-ready options, Heat & Eat choices, and lunch kits. The company has been rolling Prep+Pared meal kits in its stores.

Competition in the U.S. grocery market has intensified, with technology playing a major role. Kroger has taken stock of the situation and is in the process of giving itself a complete makeover to better compete with Amazon AMZN, Target TGT and Walmart WMT. 

In this regard, the company partnered with British online grocery delivery company, Ocado, which strengthens its position in the online ordering, automated fulfillment and home delivery space. Also, it started using Nuro’s fully autonomous, driverless vehicles for grocery delivery services. In order to further strengthen digital operations, Kroger collaborated with Alibaba to launch "Our Brands" through the latter’s Tmall platform.

Certainly, the company’s “Restock Kroger” program, involving investments in omnichannel platform, identifying margin-rich alternative profit streams, optimizing merchandise and lowering of expenses, has been gaining traction. As part of the program, Kroger has been making investments in space optimization, store remodels and technology advancements. Cumulatively, these have been aiding identical supermarket sales.

We note that shares of the Zacks Rank #3 (Hold) company have gained 12.5% in the past three months, outperforming the industry’s growth of 2.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.



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