Kroger launches restaurant supply business

Diving Brief:

  • Kroger announced tuesday that he started a restaurant supply business offering next-day delivery to establishments in the greater Dallas area.
  • Kroger Restaurant Supply offers “competitive wholesale pricing” by the case or by the unit to restaurants for delivery seven days a week.
  • The new supply activity comes as grocers increasingly court business customers for their e-commerce services.

Overview of the dive:

Kroger has positioned its new business unit as a supplier for small independent restaurateurs, offering fixed prices and frequent delivery options for establishments that may struggle to meet planned order minimums and supply schedules including many catering companies need.

Kroger has also geared its new venture as an additional resource for restaurants facing supply chain constraints.

“Supply chain bottlenecks are affecting nearly every restaurant across the country – this opportunity comes at a perfect time for small independent restaurants,” said Corey Mobley, North Texas Region Executive Director. of the Texas Restaurant Association, in a statement.

Kroger said fulfillment services are available to catering businesses and bakeries as well as restaurants. It offers free next day shipping for orders totaling $250 or more.

After building sophisticated e-commerce fulfillment networks during the pandemic, grocers are looking for ways to drive demand for these networks as shoppers migrate to stores, said Jordan Berke, founder and CEO of the consulting firm Tomorrow Retail Consulting, in a recent interview. Increasingly, retailers are looking to enterprise customers to drive e-commerce demand as they place large and recurring orders, he said.

Kroger offers the processing online primarily through its stores. It’s also building a network of automated fulfillment centers that will increasingly handle e-commerce delivery and pick-up – and that need large order volumes flowing through their systems in order to justify their high cost.

Kroger is building a 350,000 square foot automated customer fulfillment center in the Dallas area, which is expected to become operational by the end of this year.

A Kroger spokesperson said the restaurant supply service, which is currently a pilot program, is not using the new fulfillment center and will instead rely on existing fulfillment centers for the time being.

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