Kroger on Wednesday introduced online delivery in four markets as customer convenience becomes an increasingly crucial element to gain loyalty in the hyper-competitive grocery industry.
Kroger Ship launched Wednesday in Cincinnati, its hometown, as well as Houston; Louisville; and Nashville, Tennessee. It said it will "quickly" expand the service to other markets over the next few months. Kroger is the biggest grocery chain in the country with 2,800 stores under a number of names.
Kroger is the biggest grocery player in the Indianapolis-area market, according to 2017 data from Chain Store Guide, with more than 50 stores and a market share approaching 40 percent, well ahead of Walmart's 24 percent share and Meijer's 12 percent share.
Online grocery shopping is still a tiny part of the market, but supermarket operators are betting that more people will want to buy their milk and bread from their smartphone or computer, especially after Amazon bought Whole Foods a year ago. The online retailer rolled out 2-hour delivery for its Prime members in some cities, lowered prices on select groceries and launched special discounts.
Others are trying to catch up with Amazon and their efforts are threatening grocers. Target bought grocery delivery company Shipt last year to boost its same-day delivery capabilities. And Walmart, like Kroger, has expanded its curbside pickup service, which lets shoppers buy their groceries online and pick them up at the store. Delivery is free for any order with a tab exceeding $35. Smaller deliveries are $4.99 per order.
Kroger Co. is toying with other technologies in hopes of gaining an edge. It revealed in June that it was testing grocery deliveries with driverless cars. And it recently upped its investment in British online grocer Ocado, giving it access to its online ordering, automated fulfillment and home delivery technology in the United States.