Kroger shuts down Austin deliveries, lays off workers as it pulls out of Central Texas
Kroger is shutting down Austin delivery services and cutting dozens of workers as it closes its Northeast Austin fulfillment center, about two years after it first announced plans to expand into Central Texas.
The Ohio-based grocery chain only offered delivery, and no physical location in the Austin-area. The delivery service allowed customers to place an order on Kroger's website or app that was then fulfilled by robots that retrieved products from facilities and sorted them for delivery. The groceries were delivered in refrigerated vans to customers.
All orders were fulfilled at a 70,000-foot facility on 2401 Ferguson Lane in Austin, which the company is now shutting down. Kroger first announced plans for the facility in March 2022, and said at the time it expected to start deliveries later that year and eventually employ up to 161 people. The location was considered a spoke of a fulfillment center in Dallas, which the company said is not impacted by the closure.
In a statement, the company said it aims to test and quickly learn the most effective ways to deliver food to customers, and the location did not meet its standards.
Austin is one of three spoke locations the company is closing for not meeting benchmarks, according to an announcement to impacted customers on Kroger's website. It noted there will be no Kroger stores or delivery options available to Austin, San Antonio, or South Florida customers after the spokes close.
The company said in a statement that it "remains committed" to growing its e-commerce offerings and delivery across the United States.
Kroger's delivery service had been competing with a crowded Austin market with services such as grocery delivery app Instacart, as well as other stores such as Walmart, Austin-based Whole Foods and H-E-B, which offer delivery and curbside pickup. H-E-B, which has the most stores of any grocery chain in the region, has invested heavily in its the delivery space since it bought Austin-based delivery service Favor in 2018.
When is the last day to order from Kroger?
According to the Kroger website, customers will still be able to shop through May 24, including with coupons and gift cards, and the last day of deliveries will be on May 25.
Can you get a refund if you have a Kroger Boost membership?
Customers that had a "Boost" membership account will receive a refund within 30 days on monthly and annual subscriptions.
WARN notice: Over 50 workers impacted by the closure
The closure was noted in a WARN notice, short for Worker Adjustment and Retraining Notification Act, that was sent to the Texas Workforce Commission. The act federally mandates employers to give local governments notice of major layoffs or closures.
The notice shows Kroger is cutting all 52 workers at the cross-dock warehouse as part of the closure. The employees, which are largely delivery drivers, will be laid off officially on May 25.
The notice mentions that eligible employees that want to remain with the company in other localities would be offered relocation assistance but does not note if any positions are eligible. Kroger did not respond to questions about eligibility or what locations any new positions would be.
This article originally appeared on Austin American-Statesman: Kroger stops deliveries, lays off workers as it leaves Austin
