Kroger to shut automated fulfilment centres and book $2.6bn charge

Core Insights - Kroger will close three automated delivery fulfillment sites in January 2026, incurring an impairment charge of approximately $2.6 billion in its third fiscal quarter of 2025 [1] - The closures are part of a strategic shift towards a hybrid model that combines physical stores, automated sites, and third-party delivery partnerships [2] Group 1: E-commerce Strategy - The revised approach is expected to increase e-commerce operating profit by $400 million in fiscal 2026 and will not impact identical sales excluding fuel [2] - Kroger has expanded its partnership with Instacart, which has become its primary fulfillment provider, and will implement Instacart's Cart Assistant AI tool [2][3] Group 2: Third-party Partnerships - Kroger is widening its arrangement with DoorDash and plans to launch a new experience on Uber Eats Marketplace in early 2026 [3] - Increased traffic through third-party platforms is anticipated to support growth in Kroger's retail media business [3] Group 3: Operational Adjustments - The company will continue to evaluate the performance of remaining automated sites and maintain this model in higher-density markets [3] - Kroger plans to pilot store-based, capital-light automation in busy areas to enhance fulfillment capacity and improve store operations [3] Group 4: Workforce Expansion - In preparation for the holiday season, Kroger announced plans to hire over 18,000 employees across various roles, including cashiers and pharmacy technicians [4][5]