Kroger acknowledges that its bet on robotics went too far

I think there's a space for something in between Ocado and Uber Eats, in the 2010s I worked for a startup where you could book an Ocado style delivery slot for the next day from a bunch of different butchers, bakers, etc and then we'd send a van round to collect from all of them and deliver it to you. Annoyingly they ran out of money just a little bit too soon, I'm pretty sure if they'd managed to hold out until 2020 they'd have seen a huge increase in sales as everyone fully got on board with online delivery and been laughing.

I think the big win with that model vs Ocado is that scaling down is fine, you work with whatever shops are in the area and don't need to deal with building fulfilment centres. Maybe you need a car park somewhere to put the vans overnight. Scaling up is a case of moving into different areas, or onboarding new shops. Absolutely agreed that last mile is a nightmare but we mostly had it down I think, the biggest pain there was that we were relying on a bunch of third parties to pack an order, and if any of them got something wrong we ended up with an unhappy customer on the phone and needing to deal with it.

Where are you operating? I live in a dense European city and I don't know a single person who orders groceries online. Smallish shops with bike racks in front of the door are simply too convenient, seems hard to beat. Next few days shopping can easily be done in 15mn on the way back home.

I've done a few projects in (traditional, not pure ecommerce) retail, and in my experience it is a very low margin business.

This contrasts sharply with being an innovator in the robotics space, which typically is extremely capital intensive with very long ROI trajectories.

> FC size is 5-10K orders/day, maybe up to 20K/day in certain cases, but the core technology should certainly scale down profitably to 3-5K.

deja-vu from the e-scooter business. even with a good product, its just not profitable/scalable enough

The grocery business has razor thin margins. There is no dry sponge remaining to absorb this kind of massive fixed cost. The business is highly variable.

I think scaling up would be the only way out of this problem. Scaling down only makes it worse.

love ocado purely for the reason it's cheaper than other services. i suspect they are subsidising each order to build long term customer behaviour but it's a gamble when customers can eadily switch as the moat is purely pricing

> Ocado solves for scaling up, what needs to be solved is actually scaling down.

This has been solved by Pio (by AutoStore)

I see Ocado vans driving up to deliver on the Isle of Skye, which I guess must come from either Fort William or Inverness.

I can't imagine it's especially profitable to deliver a bag of food in a refrigerated van to somewhere that's nearly four hours driving each way.

But I think in the cities Kroger grocery stores serve as the fulfilment centers, so they don't need robotic ones.

There's probably still room for automation, but it might have to be different than warehouse automation.

I idly wonder if what would actually make sense here is a hybrid model that combines a gigantic fulfillment center with tens of thousands of products located "far" from people, with a large physical footprint and near to road/rail arteries, but with a mid-bandwidth, high-granularity, low-latency physical link to "near" places.

For example, imagine you had an upscaled pneumatic tube system (don't get hung up on the exact implementation, it could be a small gauge train system or conveyer belt: whatever floats your Factorio-addled boat) with a diameter around, say, half a metre to a metre, packed goods into canisters and shot into town where they pop out at local distribution centres for pickup or last-mile delivery.

This is where I thought the Boring Company might be going back before it was obvious it was an anti-public transit gambit.

Possibly the curse of rail systems applies where the maintenance of the track (tube) costs so much that it's cheaper to fly (done delivery) or drive all the way on public roads (current solution). The advantage over rail is that the land footprint is very small: the tract is about a metre wide and can be buried if needed. Perhaps it's just not really different enough to trucking it all into town using semi trailers, which would still be required for large items and especially construction materials.

Then again, even if this hare-brained system were to work, this assumes we actually want to continue to reduce most human commercial interactions to gigantic, remote, anonymous capital-intensive megasystems producing pods that pop out of the ground into robotic vending stations.

They literally went too far…

Yeah, because arguably the main advantage of Ocado's warehouse is that it's extremely dense: you can pack a lot of storage in a very small area and still access it reasonably efficiently. But this only matters if space is at a premium, like near towns and cities (and for low-margin deliveries, you want your drivers to not have to go very far to your customers).

“Never underestimate the bandwidth of a station wagon full of tapes hurtling down the highway”

In the AI analogy, never underestimate the productivity of a human when dealing with a giant pile of groceries. You can throw all the AI and robots you can at something but sometimes a $20 an hour human picking from stacks of goods and produce simply destroys it in raw economics

What you've re-invented is Keydoozle, from 1937.[1] This was the first automated grocery store. Three stores were opened, but there were enough mechanical problems that it didn't work well.

[1] https://rarehistoricalphotos.com/keedoozle-automated-store-p...

Sounds like the old general store model, you didn’t browse yourself, the shop keep would bring out what you wanted, it was always behind the counter. I experienced this in China when I started visiting in 1999/early 2000s, it’s mostly not like that anymore though. You still have department stores where you need to buy things first before touching them, though.

You'll obviously buy fewer things that way, and I can't see that making business sense.

Sounds like a lot of waiting around, versus just browsing the aisles. Maybe today’s consumers need to rediscover cash-and-carry, though.

That was Best store in the 1980s

https://en.wikipedia.org/wiki/Best_Products

Something like this?

https://www.untappedcities.com/automats-cafeterias-nyc/

If you wish to experience more futuristic fever dreams, I present the Dahir Insaat YouTube channel:

https://m.youtube.com/watch?v=Xc_6wfDYuFU

You’ve just described B&H in New York City.

I think we are mixing up two things here.

Robotics for picking and the general feasibility of grocery delivery in the US.

Ocado is good because their stock levels are far more accurate than the other supermarkets for online ordering, so you don't get as many substituted/missing items. This is sort of a side effect of having dedicated picking facilities Vs "real" supermarkets. I would not be surprised if they "lose" less stock as well compared to in supermarket fulfillment.

Then you have "is online grocery good in the US"? There's a lot of areas of the US that have reasonable density for this kind of service imo, and the road infrastructure is generally far superior to the UK which negates any loss of density (as you care about time between deliveries, not distance per se). I imagine the much better parking options in most suburbs in the US also helps efficiency (it's an absolute nightmare for a lot of the online delivery cos when there isn't off street parking in the UK and they have to park pretty far from the drop).

It sounds to me that Kroger just messed up the execution of this in terms of "marketing" more than anything.

It's even explained in the article:

> You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them

It's clearly not a technology problem, but it was made worse by heavily investing in robotics for locations that already couldn't sustain a fulfillment center.

> failure of business model and logistics

Just the model. They optimized for tax outcomes. They obviously wanted in on the "Amazon race to the bottom" game.

https://www.leesburg-news.com/2025/11/30/kroger-took-incenti...

> the real issue was delivery distances and times.

Which they could care less about. Where else are you going to go?

So what grocery stores used to be ~90 years ago, when the norm was you would give the clerk a list and they would grab your items from the back? The only stores I'm still aware of that are setup like this are auto parts stores, where 90% of the inventory is in the back.

This reminds me of the retail chain Service Merchandise which apparently used to operate this way. You'd walk around the store looking at display products, pick things out on a sheet, and then they'd appear on a conveyor belt.

https://en.wikipedia.org/wiki/Service_Merchandise

I have never been to one because they went out of business decades ago.

This gave me a flashback to Service Merchandise. No idea how widespread they were, but that's how it operated. You'd collect tags for the things you want, take them to the counter, wait a bit and your order would roll out on a belt. Pull your car up, load it and leave.

that is a guarantee for less sales, not sure it makes business sense. for example, i don't buy generic products, i want specific properties from them. and sometimes i don't know what i want, i look at the isle and only then decide. and let's not forget about impulse shopping.

honestly, i wouldn't shop at this store, i want to get the items myself, without any interaction. interactions add delays.

I do most the cooking in my house, and the majority of it is meat and produce. I can say from years of experience that it's easy to grab a bad apple if you aren't paying attention or know about food quality, and from the grocery pickers I've seen, they aren't and don't.

A guitarist doesn't just buy some random guitar from amazon - they see it in person and play it. If you cook and care about your food, using a food service just isn't something you'll want to do.

I like to browse what is there and make decisions on what I'll be eating based on what I see.

Purchasing online feels more narrow and has me thinking more about things I've cooked before vs what I might want to try cooking/eating.

I'd imagine most people aren't 100% positive on what they want to get beforehand. Sometimes you only realize you want something after passing by it. Maybe it's something you haven't gotten in awhile and hadn't considered beforehand.

And even if you are completely sure on what you want in advance, having someone else do it is not always great. At least with Instacart, the person doing the shopping frequently didn't know where something was and just assumed it was 'out' and tried to substitute it (badly). There was all this awful delay and back-and-forth and crappy picures with the person shopping to try to get the right thing.

Doing it yourself doesn't have that problem. You know what you want, why you want it, and what you're willing to bend on. No, X brand cheese is not a substitute for Y branch I wanted, never do that. But yes, Z brand and type of milk is fine compared to what I wanted and I know they are frequently out.

Grocery store employees aren't any better at this, btw. Especially since the stores like to re-arrange on a monthly basis.

I can pick my groceries faster and with less aggravation than I can navigate the online ordering UI's dark patterns and attempts to get me to "engage".

Food is what we're made of it and the buying, cooking, eating of it provides a lot of the structure of our lives. I'm skeptical of a view that would have us be even further alienated from these activities.

Shopping for food is important to me because food is important to me, and I have no desire to change this despite how "inefficient" it may be. This attitude has already very nearly optimized out most of the texture of daily life to no benefit that is apparent to me.

I worked at a food store as a student a long time ago. Remarkably few customers are weekly. We did sell entire cartloads of food on certain days at certain times but it's pretty rare. Most of the people walking in will have to skip a meal that day if they did not stop at the store for just one thing. Then add some impulse purchases. Most people walk out with one grocery bag, some walk out with only one item. Where I lived, most of this behavior was poor planning not financial. Most of the items were pretty nice, not the cheapest. People who can't plan ahead to have enough eggs or whatever will never plan ahead enough for the enormous latency of very slow delivery. Those eggs they're buying, will be cooking mere minutes after purchase not hours.

They go in to see, hear, and smell good things. They experience some products first-hand in a way that shows whether they're as advertised or not. They also know what's out of stock with many, immediate substitution options. There's also more coupon, markdown, or haggling opportunities for those who want them.

Finally, walking into stores lets you connect to people. Those who repent and follow Jesus Christ are told to share His Gospel with strangers so they can be forgiven and have eternal life. We're also to be good to them in general, listening and helping, from the short person reaching for items too high to the cashier that needs a friendly word.

We, along with non-believers, also get opportunities out of this when God makes us bump into the right people at the right time. They may become spouses, friends, or business partners. It's often called networking. However, Christians are to keep in mind God's sovereign control of every detail. Many are one-time or temporary events or observations just meant to make our lives more interesting.

Most of the above isn't available in online ordering which filters almost all of the human experience down to a narrow, efficient process a cheap AI could likely do. That process usually has no impact on eternity for anyone. Further, it has less impact on other people. Then, I have less of the experiences God designed us to have. Which includes the bad ones that build our character, like patience and forgiveness.

So, while I prefer online shopping, I try to pray God motivate me to shop in stores at times and do His will in there. Many interestings things, including impacts on people, continue to happen. Some events hit the person so hard that, even as a non-believer, they know God was behind it. I'm grateful for these stores that provide these opportunities to us.

One of the reasons I kind of gave up on deliveries after COVID was the the experience of having a friendly but slightly rushed bloke clearly politely itching to get on to the next stop turn up at some random time in the evening (it's booked to a slot but the variance was large). Then he holds your door open and either helps you unload it watches you unload a bunch of randomly packed loose items from a large handful of his plastic crates, some with a single item in them, as fast as possible into laundry baskets in the hallway so you can transfer it to the right place at leisure. That was actually somehow really annoying to me.

Tesco used to use plastic box liners which you doing just hoick out, but those were quickly stopped due to bring plastic.

I'd rather they just handed over the crates or something and I could return them for a deposit the next time. Obviously I'd also rather all the supermarkets could share the same crates so I don't have to babysit piles of each brand separately.

Maybe Ocado have a better system then Tesco here?

It’s a great convenience though, we’ve been using it over a year now and it solved most of the bulk purchases, we then visit the store for other detailed items and get done quickly.

> Or their online groceries didnt succeed because people can p4ice shop.

Ocado does just fine though, and are rarely the cheapest choice.

What are "normal stores"? For me, Ralphs (Kroger), Stater Bros and Whole Foods are the main available (what I think of as) "normal" grocery stores, and of the three anything on sale at Ralphs is sure to be the cheapest of the three.

Isn’t that the same thing? Robots without good decision making and working business model are nothing

Probably because you then need pillars throughout the entire building to support the second floor which you are loading down with a ton of weight. The average forklift weighs 3x or more the weight of the average car, and then adding racking and stock on top of that. Yeah if you completely redesign your storage system to not require forklifts you save weight there, but you end up adding the weight back with all the heavy duty track systems and extra heavy duty racks that are required to eliminate the forklifts. Plus there is liability of having that weight up top, a rack failure on a second floor could take down half the building.

It is possible, but you end up spending 10x as much on the building.

Good construction is not cheap and takes many quarters. Land outside the urban area is far too cheap and probably subsidized (directly or with free oversized infrastructure) because local government always wants jobs, even small numbers of shitty jobs.

I thought about this a lot with parking spaces, nobody like big, open, tree-less parking lots. Why not just build them up adjacent to the grocery store.

The answer is $. It costs too much and land is cheaper than building up (In most places).

The vast majority of the inventory is already on the sales floor.

Also, the backstock is minimal. Stores are designed for turnaround.

I would guess that having everything on one floor optimizes the unloading, restocking and logistics. Also construction is cheaper.