Kroger acknowledges that its bet on robotics went too far
grocerydive.com274 points by JumpCrisscross 2 days ago
274 points by JumpCrisscross 2 days ago
I work in this exact space (online grocery retailer in Europe). We're profitable and one of the few companies to be so in the sector - many online divisions are losing money and being bankrolled by the parent company with physical stores. Alternatively, burning VC money.
The thing that's wrong with Ocado's technology is that it's ridiculously expensive and tailored for huge FC's (fulfillment centers). The problem with that is that it needs to serve a large population base to be effective and that's hard - in dense metros, the driving times are much longer despite smaller distances. In sparse metros, the distances are just too long. In our experience, the optimal 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. Ocado solves for scaling up, what needs to be solved is actually scaling down.
There are a lot of logistical challenges outside the FC, especially last mile and you need to see the system as a whole, not just optimize one part to the detriment of all others.
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.
I worked in this business for over 15 years on the tech and business sides and I can say that the traditional VC-funded startup regime is fundamentally incompatible with the basic realities of the food industry. What is sort of funny about it is that in many areas there are local companies that have been around for many years doing this fantastically. As other commenters pointed out, this is essentially the milkman model.
There are a number of extremely difficult problems that are definitionally insurmountable on the timescales that VC operates -- paramount among them being the establishment of trust and mutualistic relationships with your vendors/stores, customers, and employees.
You are right that there is such a space, it just won't happen in the context of a startup taking VC cash.
You're absolutely right on that - what eventually killed the business was an influx of VC cash and demands for massive expansion during a period when we almost had delivering in a single city nailed.
>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.
Why not have drivers verify the order with the store? Like have the store folks walk through the pick ups. It might be slower up front, but it would save lots of time and money for everyone in the long run. One of those slow is smooth and smooth is fast situations. Alternatively, the drivers should have a book they could match pics to items perhaps
The other thing I wonder if it would be possible, would be to reduce revenue share for stores that routinely had issues with accuracy, but that means you'd need leverage, and you simply may not have it.
I stopped using Doordash because they had absolutely no process to ensure drivers picked up the correct person's order, let alone actually making sure orders are correct. You give me another person's order with completely different things - I don't trust you again.
This is one of the most basic functions that a delivery service should have: making sure that you get the items you ordered, in good shape.
FC's can have very efficient fundamentals if done right. Sharing shops with direct customers is very problematic - while appealing, the scaling just doen't work for them very well. They're also subject to a lot of variability due to contention with said customers.
This is why next day delivery slots worked - shops were able to pack orders during quiet periods rather than suddenly getting slammed with delivery orders that will be picked up in 20 minutes just as the lunch rush arrives. Some of the shops we were delivering for had people they employed specifically to do this, and generally they loved it because it meant their staff were doing something during otherwise quiet periods.
Next day slots generally work for few customers. We offer delivery in the next 3-4 hours (unless demand is crazy) and the difference in demand when you offer 3-4 hours and when you offer next day is HUGE.
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 live in inner London. I have multiple grocery shops around me - within 10 minutes' walk I have a fishmonger, two butchers, two delicatessens, three bakeries, three greengrocers, four mid-sized organic/international grocers, six patisseries, a large Lidl, and a very large Sainsbury's supermarket.
I visit those local shops once or twice almost every day to pick up fresh bits and pieces - but I still get bulky or heavy stuff delivered by Ocado (toilet roll, washing powder, everyday wine, that sort of thing).
There is a gas station that sells candy and stale jerky, a hard, sidewalk-less 10 minutes walk from me (probably 20). Not sure it would be feasible to go anywhere else. -American
That's the thing, though - you'd think that this would result in these "heavyweight" Ocado-style home delivery options being more viable in the US than in London. And yet, they're not.
Sure, you have Doordash-style same-hour options which are largely based on someone picking stuff up from a local store on your behalf (we have lots of those too). But the Ocado/Kroger robotic hive fulfilment centres ought to be more efficient than that whilst offering higher quality by cutting out the labour-intensive warehouse -> store -> shelf -> checkout part of the process.
I think some of it comes from a feeling of "that can't possibly work", perhaps as a hangover from the failure of Webvan during the dotcom boom. Maybe with some "well, I have to use my car for everything else, so I might as well use it to collect groceries too" layered on top.
Which all points to it being a fairly intractable problem - there are a bunch of only tangentially-related issues that need sorting out before it can be become a widespread success.
Another possibility: For perishable goods in the sort of SKU counts typically offered, it can't work unless it has a certain minimum scale. Local supermarkets supported by a largely automated (and has been for 30 years) regional distribution center have that scale from walk-in traffic. A new delivery service using high-density storage could save on real estate and labor costs on the backend, but it has to have runway to replace a lot of the local market (which may take a decade), and the whole time you're scaling, these low-velocity SKUs are literally spoiling while these expensive, high-throughput robots are mostly idle. The frontend costs of delivery are a separate category of problem.
Replacing the regional distribution center instead with even higher levels of automation, and getting your groceries delivered from the same warehouse the supermarket is, would give you the scale from the start... but then that increases your frontend delivery costs and more importantly your frontend delivery latency; High latency is a much worse thing with milk than with books or hammers.
Sure, but that's a matter of raising capital - which, again, you would think would favour the US over the UK.
To be fair, though, the bulk of Ocado's initial investors were from the retail and finance worlds - and the difference between the US and UK is smaller in those fields than it is for tech.
Balancing out the other comment - there's two real supermarkets within a fifteen minute walk of me (another American). It's fun to leave meal planning up to whatever is on sale that night.
For people in the outer suburbs where that's not an option, I don't know why a service hasn't arisen where you can plug in, "we have X adults living here, they average Y meals per week made at home, we want Z grams of protein per meal, here's our dietary restrictions, solve that system of equations out of whatever's in your warehouse and take a flat rate for delivery and percentage for your overhead." The pure delivery services all seem to be plays to hide huge prices behind tricky introductory rates. Both my local supermarkets offer delivery and presumably have the data to make that possible but they want me to still pick individual items in a vastly worse interface (any website or app) than the experience of standing in a dry goods aisle.
You underestimate how hard people’s food preferences are. They are really locked into their set of brands for each item. Immigrants pay huge markups to just get the same brand of tomato paste or beans they know. These are some of the most commodity style food items
I find online grocery shopping shines for heavy and bulky things that are a huge pain to schlep home otherwise, especially stuff that lasts a while.
All juices/waters/beers/wines, paper towels, lots of oranges/grapefruits, cleaning products like bleach/detergent, etc. When they carry them up to your fourth-floor door it's just so much easier.
The smallish shops are good for stuff you can then easily carry in a bag by hand -- meat, veg, cheese, fresh bread.
If you are getting those things anyway, and only need small portions of the other, then why bother?
Because otherwise you'd have to do a lot more planning in advance.
For instance, I called in to the patisserie this morning on a whim to treat myself to a pain au chocolat for breakfast. And I think I fancy cheese for dinner, so after work I'll nip out to the deli for some stilton and the greengrocer for walnuts and figs to go with it. I've already got fancy crackers and some good port from my last online delivery so that's everything I need for dinner.
I'm used to being able to pick stuff up according to what I feel like eating on the day. Yeah, it wouldn't be a huge quality of life reduction to have to plan meals in advance but why bother if I don't have to?
Plus, when I'm working from home, it keeps me from being entirely sedentary on a miserable, drizzly winter's day when I might not otherwise have bothered leaving the house, so it has physical & mental health benefits too.
Not a European, but this rings true for me in the US. I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world. Endless deliveries actually make that worse. I started buying more things locally in part because of that.
It's also one of the reasons I don't really like working from home.
I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world.
When I was young, I worked in a couple of supermarkets. There were a lot of people who came in each day and bought one thing. Not because that's the one thing they needed that day, but because going to the supermarket was their only interaction with other human beings.
I was young, so I thought they were just poor planners. But there was this one guy who I knew would be in the dairy aisle at 4:35pm every day, and I started having his cup of yogurt ready for him when he walked through. It was he who explained to me why certain people were low-volume regulars.
With the exception of "lots of oranges/grapefruits", you only need to get the things in the first list perhaps every 1-3 months + you generally don't have to worry about them selecting a bad box of paper towels or stale cleaning products vs every time something in that second list is "why did they even bother trying to deliver this to me" quality.
Why bother with which? I don't understand the question.
Delivery is for less frequent things that last much longer.
Local ships are for more frequent things that spoil quickly.
And adding the heavier/bulkier things to my local trips, even in smaller quantities, just makes the bags too heavy and unwieldy in the end. I only have two hands. Plus it's way more expensive to buy paper towels as individual rolls than in packs of six.
I live in a dense European city and all I ever do is order groceries online. I can order larger amounts in one go, so, batch order once every two weeks or so.
Instead of having to fight with a machine to give back my empty cans/plastic bottles, I can just give the delivery person a crate and get my money back.
Doesn't capture all my groceries, I love biking or walking to a smaller shop on occasion, or if I have a specific craving, but 90% of my groceries is delivery.
I have this conversation regularly with friends, family, coworkers...
And I've not yet been able to establish the right criteria to guess how a person is buying their groceries.
Location, age, income, number of people in the household, physical ability...
A single guy living in the city center with good income? Takes his car to go in big supermarket outside the city.
A family with four kids living in the suburbs? Goes everyday in the small shops.
At least for me. I buy fresh food via online ordering because I hate wasting time these days. Driving even to a nearby store takes 10mins round trip. Then having to walk through the store and fine what I need and checkout. I would much rather order online and get it delivered. Produce can still be a gamble, pickers have no incentive to pick the best produce but for the average meal, that’s fine.
We have mapped the planet, yet no grocery has a freaking map to find what you need.
Is this a US thing?
I think here in France the best example is Lidl. The stores are laid out the same, so not only your usual store doesn't change, but you can go to any store in the country and find what you want at the same spot.
Personally, with self-checkout, I spend less than 15mn in the store to do a week of groceries.
Not sure if it is just a US thing but it to add a little more depth. Most stores as already stated want you to wander a bit to possibly purchase more things but the other piece is most stores custom to local preferences both on what they carry and where it’s located.
Thought differently most major chains capture all of this data and can optimize stores for sales.
I think the bigger complaint is a typical US grocery store carries an insane amount of SKUs. If I was just going to Trader Joe’s it’s no problem. Low sku count layouts never change. Walmart has probably 10x the skus and it’s a struggle sometimes just finding what you want. Oh I need dry dill, well in the spice section there are 3 or 4 brands. Within those sometimes it’s not in alphabetical order. Things are misplaced or just out of stock.
That’s mostly my problem. Some of the apps have locations, often I find things not there. But for most stores they want you to wander and shop.
Though I don't like shopping at Walmart, I still have to (no store in my area, even "supercenters," has everything I need), and their phone app is absolutely stellar at telling me where a particular product is. Especially handy where there's no staff on the floor (as often happens).
That's intentional. Grocery stores are laid out to encourage you to spend more.
Like almost everything people complain about nowadays, this is not a tech problem, has never been a tech problem, and cannot be fixed with tech.
I've found two very general personality criteria for online ordering.
Planners. The people who have a meal plan in Google Calendar for the next week and rarely have to "grab one thing on the way home from the store". The people who literally have no idea what they're eating on Thursday will go to the store today or tomorrow, who knows what they'll buy.
Multitaskers. The people who do their grocery shopping on the couch while not really watching TV, or similar downtime when its job #2. I used to shop online while theoretically cooking. It'll be five minutes until this is done I'll spend a couple minutes looking in the fridge for eggs / milk / etc and add to next weeks order.
A specific criteria I've found is people in general don't trust the delivery services for non-hyperprocessed food. I can trust a sealed bag of oreos is like every other mass produced food-adjacent substance. I want to select my own roast from whats on the shelf or my own apples. So people who only eat processed food products that come in plastic tend to like online ordering, people who mostly eat more natural food tend to dislike online ordering.
You have to know people pretty well to determine their project management style and their diet.
That's interesting.
I'm a planner and that's one of the reasons I don't order my groceries. If there's one thing I know I can't rely on, it's to be delivered on schedule and/or receiving exactly what I ordered.
Meanwhile if I go to the store, I can find an alternative or go elsewhere if I can't find what I wanted.
And I'm also a "natural food" person, so I'd rather pick things myself. Furthermore, if I crush a fruit on my way home, it's on me and I'll deal with it peacefully. If I'm being delivered a crush fruit, I'll get mad at the company I ordered from and I'll have find a way to be compensated.
I don't think that works either. I'm not a meal planner, but I will usually just make do with food I've already bought. Nothing appeals? I might eat cheese toast or yogurt.
In the London suburbs you see the grocery delivery vans out and about all day every day. It very much depends on the neighbourhood though, mostly the slightly posh mums or elderly ones ordering.
In the UK, but not in London, but my order online sometimes because local shops do not have everything I want, it takes time to drive into town and shop at a supermarket, so when I am busy I order online.
Like a lot of people who work from home there is big difference between the time required to shop, and taking a few minutes away from my desk to get some stuff from the door to the fridge.
> I live in a dense European city and I don't know a single person who orders groceries online.
I live in the U.S. and have almost never used a service like Instacart. Also, when I see the item I’m trying to order in Amazon is fulfilled by Whole Foods, I typically don’t buy it, because of the additional cost.
I’d rather suffer a small amount of inconvenience to save several dollars on groceries, and often it may mean that I may need to order a different brand to pick up a similar item at a local store.
However, I’ll gladly pay a little additional money for Amazon for many other items, because it’s convenient, shipping is included in Prime, and because I can get what I want.
I make the majority of my retail purchases at a supermarket, followed by Amazon online (Prime only), then a very small percentage in-person at Target, Walmart, or a hardware/home supplies store or some random online retailer.
The best I can do to “shop local” is to use a supermarket chain; there is no mom-and-pop to support that isn’t a chain unless it’s a restaurant. I don’t pretend that this is actually “shopping locally”.
I’ve only participated in a boycott once or twice, because there is typically a practical reason for shopping when and where I do- either I need to shop then because I don’t get out much, or there’s a sale with actually lower prices, rather than the frequent “increase the price just to cut it to get you to order more” thing, which I also get sucked into, because I don’t have time to price shop, unless it’s with camelcamelcamel for Amazon.
I don't get anything delivered, but I almost exclusively use grocery pick up since so many stores near me went all or mostly self checkout.
Self checkout is fine for small trips, but expecting people to do so for a cart full of groceries is ridiculous. This trend started at walmart but has started moving up the chain to higher priced stores. I just flatly refuse to do the grocer's work for them when I'm not actually saving any money at checkout for doing so.
Similar shopping story at our house, but I will observe that Home Depot has made amazing strides into competing with Amazon for delivery of items.
They’ll ship me a $10 <thing my project needs> almost always for free and often next day, sometimes same day. And their prices are competitive in general with Amazon and supplyhouse.com.
I don’t know that it’s a great (or even sustainable) offering from their business angle, but I love it as a consumer and DIYer!
I believe that HD (and Lowes) massively subsidizes their delivery ops simply because they don't want to cede the space to Amazon. It allows them to under-stock the stores but still maintain a reasonable range of products. However each time I have ordered, they have delivered a ~$2 part via Fedex, at no extra cost to me.
They are a bigger fish than the mom and pop stores but that just means that it will take a little longer for the Amazon Prime monopoly cash flow to devour it.
Reading these two comments is bizarre from my perspective. How is Amazon competitive with anything? They tend to have higher prices than other online retailers and the intransparent market place system tries to protect shady sellers with product focused reviews instead of seller based reviews. The moment you get even a single fake product or wrong delivery all the perceived savings evaporate at once.
The idea of paying a subscription for the privilege of being scammed sounds ridiculous. The cost of deliveries doesn't magically go down because you're paying a subscription. You're paying for it either way. Either you're overpaying on the subscription because you're not ordering enough or you're overpaying in the form of higher prices that contain the remaining delivery fee.
I don't order from amazon enough to justify prime, but a few times a year I sign up for a free subscription for a couple weeks or so.
The prices on amazon are comparable to what I see elsewhere for everything I've ordered. The thing that sets amazon apart is that their delivery is blazing fast compared to everyone else. Yes, the reviews are always a little suspect, if I see tons of empty 5 star reviews, I suspect the product, but in general, I've been satisfied with my purchases.
For most everything I'm giving as Christmas gifts this year, Amazon has the best (often tied for the best) price. Things from Apple are cheaper on Amazon than from Apple (Airpods Pro 3, M4 Air, etc.)
Predictable delivery, easy/generous customer service, best/tied-for-best price, excellent selection. I'm not sure which part of that is uncompetitive...
(If you know a better price on Airpods 3 Pro or a base M4 Air, do let me know as I'm always happy to save money.)
In my experience, it varies. Amazon is competitive (usually) on high-volume stuff, but can be wildly overpriced in other cases.
It's the all you can eat buffet effect. Pay the price and don't have to worry about shipping, can watch (some) streaming without having to worry about paying, and whatever else they decide to roll into their monopoly black hole today.
Sure, if you do a full accounting of costs you may win or lose, but fundamentally people are paying for simplicity. Because almost everyone is lazy, or too busy, or too afraid of random scammers, or whatever, and they played their cards right to become the Sears Catalog from the 19th century in the 21st century.
edit - and one thing that helped them get there is the return policy, so if you get one of those scam sellers, or they sent you wrong crap, opened crap, or just plain everyday crap, you press a couple buttons, maybe drop something off at a UPS store, and problem solved. That definitely shields them from the fallout from their endless listings from sellers like QWERTY123 and ZXCVBN789, and provides an advantage over any other online ordering that doesn't have the same massive advantage of scale.
I've been scolded online for buying from Amazon. "Oh, if you look around enough you can get anything locally." I live in the Seattle area, and I certainly cannot get everything I want locally, unless by "locally" you mean taking an hour or two to drive a 40 mile round-trip to a suburb to the north. I know, of course, that Amazon is partly responsible for being unable to find some things locally, but if I want or need something and I can't get it here in town, yeah, I'm using Amazon.
I buy from Amazon:
1) When I really need it within a couple of days and can't quickly find it locally
2) When it isn't carried locally (the local retail stock is a lot thinner than 20 years ago)
3) If there is a BIG price difference -- used to be common but now much rarer. As you say, Amazon's prices are often worse than buying locally.
4) When I need it shipped somewhere else. I usually spend Christmas, for example in another city, and it is impractical to bring a bunch of presents. Amazon is good for situations like that.> The moment you get even a single fake product or wrong delivery all the perceived savings evaporate at once.
I’ve been buying on Amazon for 20 years, and I just avoid high value items. It’s great as an AliExpress with an easy return policy. If I get a fake or whatever, I return it or I toss it.
For higher value items, I go to other retailers, such as Costco.
I dislike Home Depot's politics so much that I make a point of never going there.
In general, I prefer buying local, because it makes my community healthier -- more jobs, directly and indirectly, more options to buy something this afternoon if I really need it. But the reality is that many items are already very difficult to buy. Some of that was true 20 years ago, but it's gotten much worse.
This but on the other end. I've had literally thousands of pounds of material delivered for free from Home Depot. Sheet good weight adds up very quickly.
Maybe it's different in Europe, but at least in Australia you end up paying more at smaller shops, so I tend to avoid them. Is this the case in Europe as well?
That probably depends on the country and what you mean by small. Smaller shops/supermarkets in Denmark tend to be cheaper, because they are run mostly as discount brands, while the larger stores a premium brands and have the more expensive options.
However, Danish supermarkets are generally kept small by regulation, meaning that there are very few supermarket that could be considered big by international standards.
Yes shops in dense urban areas are overall more expensive but there are discount stores like Lidl too. For higher quality products the difference is marginal (if you can even find an equivalent in a big suburban store). Having experienced both, my feeling is that it evens out if you account for the running cost of a car used often or delivery.
Yes - groceries in a small shop are easily 2x the £/calorie in the UK compared to a big superstore.
I would think the sensitivity to this would depend a lot on family size. Shopping for just myself... it doesn't matter much. Shopping for a family of 4 would be very different.
Are you comparing the cost of strictly identical products or something else? I'd be very curious to have some sources if you have any
No - small shops tend to sell mostly expensive branded products in smaller packets, whereas superstores sell larger packs of unbranded products.
In my country and city the small shops are largely stocked from buying the same things from larger shops combined with their own resupplying network. So you can either walk 100m to the corner shop, pay couple dozen % extra or walk 500m to the nearest Lidl or similar and save on basically the same products.
For a first world country, Germany has ridiculously low food prices. These are found at the chain supermarkets (Aldi, Lidl, etc.). They tend to be small by American big box standards (perhaps 1000sqm, so maybe 3x the size of a bodega). There's a lot of these supermarkets everywhere in the country, most people can easily come across them during usual daily trips.
I live literally five minutes walk from a decently sized supermarket, ten minutes from another, and ten minutes on the bus from a great big one. One of my neighbours still gets supermarket delivery. There seems to be some sort of market for it, anyway...
So that’s 10 mins round trip. How many times a week, plus the time it takes to pick and checkout.
I mean, I'm walking past it anyway on my way to the office or to the bus stop.
Right we are all different. I don’t want to bother time with walking inside and picking things out. I would rather spend time with my family. All those minutes add up. Some enjoy it, others find value in that time spent, some of us like myself don’t.
We use Costco delivery at my house because it’s 10-15min each way to go there plus an hour at the place shopping at best (long lines are common). With 2 kids you feel that time especially given how frequently you have to shop for groceries.
It’s a more limited selection but there’s plenty to choose from and I’m done picking out my groceries in five minutes. They magically show up at my door for very little extra cost and I don’t have to bicker with my kids about grabbing a bunch of random stuff either.
I’m not saying you’re wrong for feeling that way, but you’d be surprised how much work it is to go to a grocery store, no matter how close it is. It’s important to think about other factors here.
>They magically show up at my door for very little extra cost
I find tipping for grocery delivery adds pretty significantly to the cost.
I save money because I have Costco executive membership which also gives me Instacart for cheap, so I put those savings into the tip. Nets out about the same plus several hours of my life aren’t spent at Costco every month.
Many of us enjoy shopping, at least enough that what we would pay for it isn't much of a deal.
Just talking about why some people would want to use delivery even if they live close that’s all. Personally I can do without the chaos of Costco ha plus I go in person to my local grocers plenty in between.
> I’m not saying you’re wrong for feeling that way
I mean I'm not feeling any particular way; I don't have a problem with the neighbours using it. I'm somewhat surprised that it makes sense for them, but each to their own. Myself, I just shop on the way home from work (my walk brings me past one of the supermarkets).
There appeared to be some tone/judgment in your previous comment but I guess I was mistaken!
judging by his name, he is perhaps in Sofia. I am also living here, and can confirm that many middle class people order groceries online.
Berlin here, people order from bike delivery grocery stores all the time. Not necessarily to do your weekend shopping, but still.
Isn't this expensive after you factor in the extra margins and delivery costs?
Well, ish. German grocery prices are still quite low, comparatively. People use the delivery services not for full weekend shopping, more if you get home late and the fridge is empty, or a public holiday is coming up etc.
Still, they are popular.
Also, anecdotally they are more popular amongst less price sensitive people with disposable incomes, where paying for the convenience is worth it.
But also, definitely not the Ocado model.
There are old, disabled, sick who rather by online than walk. Normally I walk about a mile to grocery store several times a week. But when sick Amazon fresh or whole food is the best price/quality/time option.
I live in a not-so-dense European city (Bratislava) and several our neighbours here in the extended city centre order groceries online, although we have a small shop within 100m and supermarkets within 2km of driving. It's very convenient for parents staying at home, for example.
> Smallish shops with bike racks in front of the door are simply too convenient
Most people don't live in city centers. Because they are the most expensive places to live in.
You don't need to be in a city centre for small shops with bike racks.
This is village with a population of a bit less than 3000, which I only know about because I have walked East-West across most of the state of Brandenburg (from Słubice in Poland to the city of Brandenburg) and this trains station was a convenient break point:
https://www.google.com/maps/@52.3459295,14.2800967,3a,60y,14...
Here's Aberystwyth, where I did my degree, population 13k, nearby villages boost that by about 6k, students by another 8k:
https://www.google.com/maps/@52.4145833,-4.0848806,3a,75y,19...
I grew up on the south coast of the UK. Which is certainly expensive overall, but it has cheap areas like Leigh Park which used to be entirely council houses (i.e. made for poor people and run by the local council):
https://www.google.com/maps/place/Leigh+Park,+Havant,+UK/@50...
One of those shows several cars in the photo and a single bike.
The other two show pedestrianised areas, and all three show pedestrians without any indication of how they go there. When I to to similar areas in my town (pop approx 23k) I have drive there, park, and then walk around.
I have several shops within easy walking distance and many people (including me) do walk to them, but quite a few drive. Few bikes (kids mostly) at shops although leisure cycling is VERY popular here.
One of the nice things about an edge of town area with its own identity as a village is we have a lot of local stuff which is walkable and friendly.
The UK is strange, it's really not bike friendly but you do have rows of small shops outside of city centers and towns have many of them too. France is rather the opposite or simply worse on all aspects in the countryside.
The UK varies a lot. A lot of places are walkable so a mix of public transport (in cities) or car and parking and then walking are common.
I never had a car in London, and would not want to drive in central London. Public transport is faster, less tiring, and while not cheap, is cheaper than running a car.
Living in Cheshire a car is a necessity.
> One of those shows several cars in the photo and a single bike.
Yes, and? "Cars are popular" is not a surprising claim that anyone has been contradicting, so far as I can see. (Also, Aberystwyth is tiny enough to get around entirely on foot, and hilly enough that bikers have to be exceptionally fit, and yet despite this, bike racks).
> The other two show pedestrianised areas, and all three show pedestrians without any indication of how they go there.
The Edeka in Briesen is one of the other two, I don't see a pedestrianised area, do you mean the car park owing to the open-air market set up in it?
The other one (Leigh Park) is literally in the middle of a typical UK conurbation with, as is normal in the UK, approximately universal pedestrian access. People can walk there easily from their homes, they can cycle, they can drive, they might even take a bus. One thing they're really not likely to do is come from very far away, because the only people who know about Leigh Park are the adjacent parts of the conurbation and they mostly look up their noses at it because it's poor.
The claim was made further up the thread that "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" and I interpreted your photos as supporting that claim.
My point is that it is not "shops with bike racks" that are the alternative to online groceries, it is a mix that definitely involves more use of cars than bikes, plus probably more walking and public transport than bikes too.
Ah, got it. I missed that interpretation of the surrounding context, that's fair. Looking back at the comment you mention, I see how it could be interpreted as either "e.g." or "exclusively" bikes.
To your point, I agree, it's definitely not just bikes: I could bike to my local stores, I actually walk most of the time. With the "e.g."/"exclusive" split: Back when I was commuting, I did so by bus and train, and would also often go via a shop on the way home. The Briesen example is close to the train station, so my guess is that many of the locals would do likewise.
I'd go further though, we do order online about once every 6-8 weeks, because bulk purchasing 18 litres of soy milk and another 9 of long-life cow milk that way is more convenient than frequent small purchases at the same time as the perishables.
You don't always need to be a city center to have this convenience, but you can't be in an area that is car centric... And usually when people compare the cost of both of these places, they only account for the cost per square meter of accommodation.
You'd get these in inner suburbs, too. And non-inner suburbs, for that matter.
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.
We're proving that automation can happen in that space profitably if done right - carefully, surgically and with a small, focused team. There's Autostore in that space and that system has a massively different economics than Ocado's solution, despite the similarities.
So, what you're doing? Sounds great!
Right now we're doing two robotic arms and a lot of conveyor belts - some conveyors serve as just transport, others storage of order totes and some others serve a dual purpose (they move the totes but due to the length we let them buffer for a bit). Additionally, a lot of software automation to help people.
Does low margin matter? If you are replacing paid people, arent you trying to replace that cost part of the equation?
> 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
Ours is profitable enough. And it can scale but covering more area with FC's of a profitable size. Additionally, market penetration of online grocery shopping is growing rapidly and has no reasons (that we see) to stop growing (as a % of all grocery shopping).
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.
No true for us at least. Well kind of - the scale I'm mentioning is required if you're doing your own tech like we do. We develop all our core tech - the website, the logistics operation automation, the last mile app and scheduling. If we can do that profitably, what do you think will happen a company like our develops a few FC's of similar scale using the same technology?
The margins are thin, but not as razor thin as you might think. The grocery stores have a lot of overhead that we don't. Additionally, people realize that not only is that the case, but they also save from their own costs - just driving to the store is not free, let alone the time you spend, which is massively cut down.
Or you sell every bit of data you collect.
We don't need to do that at all. Essentially zero. Whether we'll do it in the future - I don't know. It's not really under my control, but right now we can be profitable without needing it. And we're price-competitive with the large grocery stores.
> Ocado solves for scaling up, what needs to be solved is actually scaling down.
This has been solved by Pio (by AutoStore)
Autostore is great, but it's a small component for a business to be profitable end-to-end. Maybe 20% of the whole thing.
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
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.
I'd guess that they make a loss on this, but that they accept some losses in exchange for being able to say "we cover the whole country!" This is the case for pretty much any delivery business.
Meanwhile the AirBnB dwellers continue to not spend a penny locally while taking up valuable housing.
They're actually worse than the motorhome brigade.
So who's their target customer? Are we talking about Amazon/Temu scale here?
Seems so, but the economics for groceries don't work like that since you don't ship a slice of meat and a bottle of milk like you ship a 512GB SD card or a smartphone.
They literally copied their supplier ( autostore ).
Unfortunately, auto.ol shared secrets with them, Ocado abused that in court.
Literally, Fuck Ocado. I wouldn't trust them.
Some context: https://archive.ph/Apfdv
Autostore ended up paying Ocado? How did Ocado abuse them?
Because autostore shared trade secrets with Ocado. The lawsuit was found to be not valid.
Note: Ocado was a customer of Autostore in 2012 and just copied them. Sharing IP basically invalidated the lawsuit.
https://www.blackstonechambers.com/news/autostore-technology...
Autostore disclosed their design externally before the patents. So the patents were "invalidated" by themselves
At least read what you’re posting:
AutoStore claimed that several of its European patents covering cube-storage robots and grid-based systems were infringed by Ocado’s Smart Platform robots and storage grid. The judge looked closely at the “central cavity” robot patents (EP 2 928 794 and EP 3 070 027) and two other related patents and compared them to earlier disclosures and designs. He found that the claimed inventions lacked novelty and/or an inventive step, meaning they did not add enough new technical idea over what was already publicly available, so the patents were revoked.
Additionally, even if the patents were not invalidated, the judge found that Ocado did not infringe them, even if they were valid. Specifically, Ocado’s robots and grid as actually built and used did not fall within the wording of AutoStore’s patent claims. The court concluded that, on proper claim construction, Ocado’s design did not use several key features required by the claims, so there was no infringement in any event.
This is all in the judgment.
Finally, Autostore had to pay Ocado $256M USD: https://www.therobotreport.com/autostore-to-pay-ocado-256m-i...
Sounds like they just put them in the wrong places.
> Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw.
> “Ultimately those were hard places to make this model work,” said Fenyo. “You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them. And so ultimately, these large centers were just not processing enough orders to pay for all that technology investment you had to make.”
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.
It depends on your business model.
If a basket of groceries brought online costs $15 more than the in-store prices, then you can pick in-store profitably, very easy. That's the instacart model.
But if a basket of groceries brought online costs about the same as buying in-store? With the retailer bearing the costs of picking, packing and delivery instead of the customer?
Well then you need something more efficient than a store.
Even $15 more isn’t enough on account of delivery time, transpo costs, driver time, picking items, and bagging. Current model is for drivers to subsidize by being tricked into taking unprofitable orders.
From what I've seen, for grocery the model is they'll give you the least desirable or near expired stock that the walk-in customers won't grab. So they're basically saving spoilage. This happens so reliably I'm absolutely convinced this is how they 'pay' for it without raising prices.
I've also noticed this with hardware stores like Lowes. If I place a pickup order they more often than not will pawn off on me their broken, returned, or even used and damaged stock. Items like building wrap will have soil and rips on it, concrete mix will be spoiled from moisture, lumber will be all the most warped pieces (if you don't order a whole pallet, expect every last piece of fractional pallet will be knotted to hell, split, twisted, and badly warped), plumbing valves will be open package and leaky, etc etc. It's like clockwork, even if the stock sitting on the shelf doesn't have these problems. Due to this there are some stores I will never do a pickup/delivery order from.
Here in the UK it's common for online grocery sites to say "fresh for at least X days" on every item, so bread will usually say 5 days, eggs 7 days etc etc. Doesn't matter if I select collection(so someone is picking those items for me at the store) or delivery(so they come from a larger warehouse). They stick to that promise.
An example of my experiences: you’ll get the apple with the bruise and maybe some damage instead of the nice one you’d pick out if you’re shopping for yourself.
That's my experience, too. Also the dented tin and the miniature mango. And, if the order is arriving at 10pm, the salad best before midnight.
A counter-example - with a weekly shopping list way too long (family of 4), its hard for the husband to pick up all items as fresh as possible and do all necessary checks on each of them. Or in other words - even people themselves do make same mistake, I certainly do.
People will forgive themselves for saving money, but will not forgive others at the delivery service for charging extra.
There is no delivery service that's cheaper and good enough, or dirt cheap and expected to be awful, but those are large profitable retail operations. The only sector offered is more expensive, which annoys people if they occasionally get a below average item while also paying a lot more.
Delivery is for people who buy tenderloin not ground chuck and they get MAD when their tenderloin isn't perfect.
If Kroger operates the same was as Ocado does in the UK, then the drivers are paid by the hour, with the company providing the van and fuel.
Agree a lot of modern delivery businesses involve "self-employed" drivers getting paid a pittance and using their own vehicle and fuel, though.
And how about charging more in store than online?
On two separate occasions, I stopped by Walmart recently and spent $0.50 extra and $1.50 extra by walking in, going to the aisle, and picking up the item myself.
The Walmart app even tells you that the price on the app is only for online orders. But I didn’t want to wait for an unknown amount of time for a Walmart employee to bring it out to my car (been more than 10 to 15min a few times).
So basically, I pay extra to avoid that volatility in time to run that errand, and I do more work for it.
Yep. Wal-Mart has been that way for years now.
I rarely shop at Wal-Mart. There's only a few things that I buy there.
One of those things is motor oil: Their online pricing for 5 quarts of full-synthetic whatever is usually impossible to beat.
The only catch is that you have to go to the store, park outside, and wait for someone to bring it out. Going inside the store to buy it in person often costs several dollars more (and those dollars count towards the next cheeseburger).
It seems completely asinine for it to be this way, and I feel completely silly waiting outside for someone to bring me a single jug of motor oil and hand it to me through my car window, but it's very clear that they don't want me in the store.
And I'm cheap. So I play their game and let them do it for me.
(It's usually very fast for me, so there's that.)
And how about charging more in store than online?
I find your Wal-Mart anecdote interesting, because the chain supermarket that I use is the exact opposite.
I buy the same items from the same store every two weeks (then supplement at neighborhood stores). Sometimes I shop in-store, and sometimes I get delivery. But the two-week shopping list is so unchanging that I even use the shopping list on the delivery web site when I'm walking through the aisles.
Because of this, I notice that the supermarket charges more for products being delivered than those retrieved in-store. Sometimes it's enough that I'll text my wife a picture of the price tag in the store, followed by a screenshot from the store's delivery web site.
Recently from memory, a 12-pack of ginger ale was about $3 more for delivery than in the store. But I'd say overall, probably 80% of the items I buy regularly are cheaper in the store.
These days, I only get things delivered if I have other significant obligations that warrant paying a 10% delivery markup, plus the delivery fee, plus a tip.
I think the price discrepancy between in-store and delivery is the reason that so many supermarkets I've been to recently (and also Macy's) have zero cell phone service under their roofs.
Using a retail store for fulfillment means orders are accepted for items that are out of stock. the ordering system doesn't have reliable inventory info. Then the customer gets a partial shipment. This is the curse of Safeway grocery ordering.
Kroger placed one of the sites in Orlando to also service Tampa and Jacksonville when they have 0 regular stores in the entire state. They were trying to use it to expand into the area, but I never saw very much in terms of advertising or promotions to drive demand but it could have also been that the robots were so bad that they couldn't attempt to market and push volume.
I lived in Jacksonville for most of my life, and near the end of my tenure I started noticing the Kroger trucks. They were coming all the way from Orlando? That's like a two hour drive for cold groceries, feels expensive.
(i do recall the chatter that this was their way to compete with publix, although I don't know anyone who actually used it.)
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.
Buried anything is just horrendously expensive. Partly because of other things that are already buried.
Sure, but "we're going to cut the costs of horizontal drilling to a tiny fraction" was the Boring Company's original stated goal. And not all of it does need to be underground.
Even if it was a good idea (which I doubt, it's just a idle thought), I don't think there's a practical way to retrofit such a system in existing cities due to the costs, planning and presumably private funding for a non-public network, because the public road system exists, needs to continue to exist for large items and can be used for virtually free in comparison. So if/when the depot-to-neighbourhood leg is automated, it's much more likely we'll see drone vehicles on the road or occasionally in the air instead of dedicated pipeline-like delivery systems.
Even without the pipeline, you can conceive of self-diving heavy vehicles pulling up next to local delivery hubs and disgorging thousands of shipping pods into a robotic receiver. From there they either get picked up, droned, Starship'ed, cycled, whatever to the eventual front door. It's still possible just having then self-drive right to the door would turn out cheaper.
Sounds very sterile as an experience, but really it's only an optimisation of the small, but highly distributed, remaining segment of inefficiency in the existing global machine that already converts raw materials to a widget or food and gets it to within 100 miles of your house.
> Sure, but "we're going to cut the costs of horizontal drilling to a tiny fraction" was the Boring Company's original stated goal.
Sounds like the sort of idea a con man would pitch. Oh wait...
To be fair, he did do that for kilos to orbit via reusable rocket, so there was a moment when everyone went "hmm maybe there is a TBM equivalent of the Falcon 9".
But presumably it turned out that actually Herrenknecht and Hitachi aren't stupid, whereas, say, Boeing had been leaving opportunity for radical cost reduction on the table.
There existed a well known path for reducing costs to orbit, and the market was non-competitive and highly non-optimized for decades. One single company made a single experiment in that path, and it was somewhere on the middle between success and failure.
That's not the case for drilling. The Boring Company has no clear proposition about how they would reduce their costs.
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
I had a wonderful retro futuristic dream about an automated Costco warehouse a few weeks ago. It was one of the less weird dreams so I still remember it clearly.
Basically, each section is like a closed areas with some windows. Customers order at the computers by the windows and flash their membership cards. Robots glide left and right to move 10 samples to the customer, in an arm with rotating clips. Customers can press a button to rotate the samples, observe them, and place an order by pressing a button. Samples not chosen are temporarily stocked at the window as a “stack”.
In each closed section, there are humans who monitors and maintains the robots, and occasionally fetch samples when robots stop working (hopefully it too often, you know those 9s).
At the exit, a human worker assembles the packages and hand them to the customers with a smile. Customers have a last chance to return unwanted items.
Why was it a retro futuristic dream? Because the customers have the option to go into a bakery to enjoy a cup of coffee/tea, some cake and socialize with fellow customers. All of them looked like the men and women from advertisement from Fallout 4.
I’d like to shop or even help build one of these.
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...
There were also automats, automated restaurants serving all food through a vending machine (or more accurately, wall). Classically all for a single fixed price (a nickle).
These are featured in several cultural references, such as the 1962 Delbert Mann film That Touch of Mink, and PDQ Bach's "Concerto for Horn and Hardart" (being named after a prominent New York City automat chain).
Mink: <https://yewtu.be/watch?v=Y3GXMB4VPY8>
Concerto: <https://yewtu.be/watch?v=NT6bxlnS1Is>
And what some of us might not have the context for, is that grocery stores at the time were usually clerk-serviced; Just like you don't pump your own gas in New Jersey, at the time the norm was that you handed the clerk a list of products and they fetched them from the shelves for you.
Arguably this model has a great deal of compatibility with robotic compact storage, especially in high-land-value areas.
And surprisingly, it was actually Piggly Wiggly that was the first grocery store to open up their warehouse and allow customers to self-service! [1]
> Piggly Wiggly was the first self-service grocery store.
And both PW and Keedoozle were launched by Clarence Saunders (touched on in the history link you give, more under his bio page):
Incredible, they were 75 years ahead of their time.
That kinda stuff is why I'm an incrementalist, as opposed to "Great Man" theories of civilization. A big impressive product or leap-forward is mostly luck and thousands of cascading preconditions on small improvements everywhere else, and often not even the first person to try.
It's not hard to imagine that if a fundamentally similar store today that took the world by storm, there would be a profusion of news stories asserting that the founder is a genius visionary, with nary a peep for Clarence Saunders et al.
But if the technology is not ready to be implemented yet, was it really a genius level idea?
Here’s my idea: instant teleportation.
I expect to be credited
I think that's kind of the point: there are no "genius ideas", at least not at the level and frequency popularly portrayed. If teleportation isn't feasible then the idea isn't genius. If teleportation is feasible, then using it for transporting humans isn't genius, it's incredibly obvious.
Or to give a real-world example: The Wright brothers did some great work on making aircraft steerable and doing wind-tunnel tests, but working planes were mostly a product of ICE engines finally reaching sufficient power-to-weight ratios, not of the Wright brothers being unique geniuses. In a long line of people trying to build heavier-than-air aircraft they were simply the first to have access to the necessary technology to make it work
Thank you for that rabbit hole. Interesting that the same guy gave us both of the present day shopping systems just one was too far ahead
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.
Had a large-format (for its time) chain store in Canada like that until 1996: https://www.tvo.org/article/what-happened-to-consumers-distr...
Basically a catalogue store without shipping to your door.
Oh Service Merchandise was a thing in the USA also, where I was living at in Mississippi at least. It was basically catalog focused store with a showroom.
IKEA is kind of like that also, but you have to get everything yourself after picking it out upstairs. And Sears might have been like this at some point before I was born.
Argos in the UK was similar. You would go into the store and look up the product in a catalog. Then go to counter and order it, wait 2-5 minutes and they give you the product. I found it quite convenient.
Screwfix do this too. Just a counter with a handful of staff who go and get your items.
If you pre-order it's waiting at the desk. Very handy for people who can order from the job site on the account and send the lad round to grab it.
And a (relatively) unshittified website too because if jobbing tradies can't use the damn thing because it's too loaded down with ads and bullshit, they just won't.
Screwfix is an all-round excellent consumer experience, for DIY or trade. The reviews on the website are often hilarious as well.
They're still there. Was surprised to run into one recently when I was in London (they pulled out of Ireland a while back, and I'd assumed they'd just closed totally at that point, because it _does_ feel like an increasingly marginalised business model.)
They still exist. Tend to be pretty competitive on price, although they must be losing out to online shopping in a lot of places since they don't offer any showroom advantage.
In my experience because you're picking up from the Argos you can do an instant return if you realize you ordered wrong (or the item is rubbish). Not perfect but a good way to get your hands on the product with an easy refund option
Little bit more specialized, but Lee Valley Tools [https://www.leevalley.com/en-ca] stores seem to still operate this way. Showroom (and a few computer kiosks) and order forms up front, then line up for them to pull the items from the back.
Reading the history of Consumers (thanks, I never knew this existed):
>In the 1990s, Consumers Distributing struggled to compete with Zellers and then Walmart Canada. Consumers Distributing sought bankruptcy protection in 1996.
And Zellers went under just a few years ago...
Most of small town India is this. Small store, one person, usually owner or their family member, doing everything.
You'll obviously buy fewer things that way, and I can't see that making business sense.
Yeah, that could be true. I'm not sure how many people are similar to me, who are allergic to "window shopping" and just want to buy, pay and exit. My Costco session is less than 30 minutes (from parking to back to car) in average.
I do research price, though, so if they show a big DISCOUNT sign and is more or less honest with it, I'll probably grab some, too.
Sounds like a lot of waiting around, versus just browsing the aisles. Maybe today’s consumers need to rediscover cash-and-carry, though.
In the dream customers just walk around and make orders. It’s actually old style I think, but with robots. Yeah it’s a bit like cash and carry, but customers didn’t move into the sections. They just get to browse the samples robots carried to them.
TBH, now that I think about it, the dream was way more vague than what I described in the reply. My brain probably reasoned about the idea subconsciously.
That was Best store in the 1980s
In my home town, they tore the Best down and replaced it with a Best Buy, which was very confusing.
Something like this?
Yeah, something like this.
The only exception in warehouse was the cafeteria. I guess my brain wanted to make something retro futuristic so it made the cafeteria “retro” — manned by humans and cooked by humans too. There were even balloons inside now that I recall…
You’ve just described B&H in New York City.
You've reinvented the Soviet grocery store, but with robots instead of people and with a $7 cup of coffee.
I remember those stores as I came from a similar background. One vital difference is that they all have workers who have a straight face and don’t give it a fuck about customer service.
Then in the 90s they were all washed away by the new ones.
If you wish to experience more futuristic fever dreams, I present the Dahir Insaat YouTube channel:
This is a failure of business model and logistics, not a failure of the robotics.
> Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw.
They over-spent on automating low-volume FCs. You could draw comparisons to Amdahl's law, they optimised the bit that wasn't the issue, the real issue was delivery distances and times.
Ocado has had good success with the robotics approach in the UK, because the UK is very high density compared to a lot of the US. Plus Ocado put a lot of work into creating good delivery routes, whereas it sounds like that wasn't a component of the automation stack that Kroger bought.
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?
I've always said that in the back of my mind, the most successful grocery store would be the 'walls' of the store -- bakery, deli, produce, meats, floral, cheeses, dairy and having a little selection of store brands in the middle where consumers can pick up (and vendors can pay a premium for endcap space, because they're the only non-branded products out there), with the rest of the SKU's behind the walls of the grocery store in a fulfillment only model.
Kroger should have pulled a Wal-Mart and turned to their shrink-heavy stores in urban centers to online fulfillment only -- basically only their delivery drivers can retrieve items for an order, and everything's shopped by an associate (Look south of the MicroCenter in Dallas if you want to see what one looks like: it still has the Murphy USA in the parking lot and is basically an unbranded walmart building with 'driver' and 'associate' entrances -- and then deployed the robotics there: less retail space, more online/fulfillment capacity (have humans grab produce and custom sliced/packed items, robots pick the dry goods), and while you lose some cashier jobs, you'll probably have net improvement in terms of time waiting to be picked.
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.
Toolstation still has a model like that, and I gotta say I love it. They also seem to hire people who actually know something about the products they sell which is an unfortunate rarity these days.
Only other places I can think of is weed dispensaries and pharmacies.
You could also count shoe stores and high-end jewelry and watch stores in that the clerk has to go in the back to fetch the non-display model.
Professional supply houses are usually that way, too.
Graybar[1], for instance: There's a counter with bar stools, and behind that counter are people who know their inventory very well.
I just walk in and tell them what I want. They write it all down on paper faster than I can say the words and then disappear into the back to fetch it while I help myself to a free ice cream sandwich from the freezer over on the right that one of the local trade unions provides.
[1]: Graybar is a US-based electrical supply place. The companies I work for have accounts there, but as far as I know anyone can walk in and buy stuff. They also have some datacom stuff. If I'm in the middle of Nowhere, Ohio and need, say, a single-mode patch cord today, then there's probably a Graybar less than an hour away that has one in stock. Otherwise, they'll have one for me tomorrow before 7:00AM.
The instant I read the first sentence of your comment, I thought "McMaster-Carr but for food" might be the most appealing pitch for online grocery delivery I've ever heard.
...with the caveat that McMaster's facilities are staffed by people, not robots.
Amusingly, the Kroger near me is almost that way already.
Log into website, fill the cart, pick a time window, and push the button to order it. Someone starts working on it nearly instantly. The order is picked and waiting in a few minutes.
It's fast as fuck. Except...
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If someone at Kroger ever reads this, then:
That time window aspect is the part of the system falls down hard for me.
Before I order, I have to pick a window in the future when I want to pick it up/get it delivered.
"I'm ready when you are; ASAP" isn't an option. Nor is "I'm already in the parking lot, you bunch of dweebs -- just bring my stuff out. Please?"
So if it's 6:05 when I order and the next window starts at 8:00, and they're fast as fuck (as they are) and have it done in less than 15 minutes, then: I'm waiting around for more than an hour and a half for nothing.
Because until the apparently-completely-arbitrary window is reached: It won't let me check in to pick up. It won't schedule a driver. My groceries are just sitting there (ideally stored at the right temperature but I can't know this) at the store while some wallclock mechanism that was designed by an asshole runs out.
This makes the whole thing feel clunky, stupid, and insulting.
It results a system that I use only when I absolutely do not want to be inside of a grocery store, like when I'm sick as hell in January and every body part hurts. Any other time, it's way faster for me to go in the store and shop it myself.
It should be convenient. It is instead almost always a burden instead of a benefit.
If picking up a pizza from Domino's worked like this, then they'd have gone completely out of business decades ago.
Our Kroger has the same service, we use it a lot. Grocery stores are annoying to me, and Kroger feels almost intentionally designed to piss me off, so that's why we use the pickup order thing. Beware:
1. Prices on the app are frequently higher than prices in the store. 2. Not all options available in the store are available in the app. 3. Don't assume they'll always have it ready on time. Or, at least, don't plan your day around it.
They force you to pick a window because stores have limited staffing, and only so many orders can be fulfilled at once. "Hire more people," you say? Hah!
We don't do delivery, so I can't comment on that aspect of the service.
I mean: Domino's also has a limited staff.
And most of the process is very similar between Domino's and Kroger.
Just pick out a selection of stuff on a website, and order it. They both provide timely status updates of that order. They both have varying staff levels and workloads. They both certainly have days when they're running very far behind, and days when they feel like they don't have much to keep busy with.
They both have pickup and delivery options; sometimes, with different per-item prices, deals, or fees for each option.
But that's where the similarities end.
If a person orders a pizza at 6:05 and it happens to be ready by 6:30, Domino's doesn't make that person wait until 8:00 to pick it up. They want it gone; the sooner, the better. A person can pick it up (in the store, or they'll bring it out to the car) as soon as it is ready. Domino's does not want any queues at all; neither inbound, nor outbound. And this makes sense: They're in the business of selling pizzas, not storing pizzas.
Kroger isn't like that. If a person orders groceries at 6:05 and the order is ready by 6:30, then: They hold the groceries hostage until 8:00. It's as if an otherwise-complete order just isn't ripe to be picked up by a customer until it has had time to purge itself in a waiting area -- regardless of workload. The queue is mandatory, and is governed not by the physical readiness of the order but instead by the clock on the wall.
This is inconceivably stupid and unnecessary. It serves no benefit to me, nor to the corporation, nor to the employees that work for that corporation. One might think that they'd be aware that they're in the business of selling groceries, but this mandatory purgatory shows otherwise.
(I'll betcha McMaster-Carr doesn't sit on stuff while a clock runs. That's a Kroger specialization. :) )
One difference is that the Domino's employee's job is to make your pizza. None of their other duties are exactly rocket science. I ran a pizza place, I'd know. Meanwhile, preparing your grocery order is maybe the third priority on any given Kroger employee's list, behind running a register, stocking shelves, inventory, cleaning, tending to Kroger's spastic self-checkout machines, ...
I guess I prefer my groceries to be ready at a predictable time, rather than sitting around waiting between 1 and N hours. No experience I've ever had with food delivery in the age of DoorDash has made me think "yeah, I want more of this experience in my life."