Kroger should rethink Ocado customer fulfilment centre bet
Kroger has made a wrong online delivery bet on Ocado, according to Brittain Ladd, a supply chain consultant and former Amazon exec.
Earlier this week, the US retailer introduced its first customer fulfilment centre, powered by the Ocado Smart Platform.
This is the result of an exclusive Kroger and Ocado partnership, signed in 2018.
The CFC is located in Monroe, OH, a city north of Cincinnati.
But Ladd, a former consultant for Kroger, isn’t a fan of the move.
“I recommended to Kroger to enter into an agreement with Ocado or acquire Ocado. However, I made it clear to them to focus on micro-fulfilment first, and only then evaluate a relationship with Ocado,” he says in a LinkedIn post.
“I told Kroger that if they enter into an agreement with Ocado, that they should build Ocado's sheds large enough to fulfill online orders and replenish groceries to their stores. This strategy would allow them to close the majority of their older 46 distribution centres.”
Ladd argues that the retailer doesn't have the right executive team in place.
“The next CEO of Kroger be hired from outside the company. A new CEO will evaluate the agreement with Ocado, and I won’t be surprised if they cancelled the agreement. Sergei Goncharov (CEO at X5 Retail Group’s Pyaterochka chain) is my choice for CEO,” he comments.
He adds: “I know that I’m right when I argue that Kroger is following the wrong strategy because consultants from BCG working at Kroger, and executives who work there, continue reaching out to me saying my strategy would be better.”
“I like Kroger. I don’t like their strategy,” Ladd concludes.
Kroger did not respond to our request for comment.
