According to Supply Chain Dive, Kroger is expanding its Uber Eats partnership to enable delivery from over 2,600 of its roughly 2,700 supermarkets. The companies plan to develop retail media experiences together while offering cross-promotions between Kroger’s Boost loyalty program and Uber One. This follows Kroger’s September announcement of a similar DoorDash partnership covering nearly all locations. Interim CEO Ron Sargent emphasized during the Q2 earnings call that stores are now the priority for fulfilling online orders to reduce last-mile costs. The company is also conducting a full review of its Ocado automated fulfillment network while pushing store-based fulfillment as more efficient.
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The Store-First Pivot
Here’s what’s really interesting about this Uber deal – it’s part of a much bigger strategic shift that Kroger has been telegraphing for months. They’re basically saying “screw it, let’s use what we already have” instead of building out expensive automated fulfillment centers. Stores are closer to customers, the inventory is already there, and apparently the math works out better for delivery costs.
But here’s the thing – this represents a pretty significant course correction from their previous Ocado partnership. They spent years and millions building those automated fulfillment centers with the UK robotics company, and now they’re doing a “full site-by-site review” of that entire network. That doesn’t sound like doubling down on automation – it sounds like they’re reconsidering the whole approach.
Too Many Delivery Partners?
Now they’ve got Uber Eats and DoorDash both covering nearly all their stores. On one hand, it makes sense to cast a wide net and capture customers wherever they prefer to shop. But I have to wonder – doesn’t this create potential channel conflict and complexity? You’ve got different pricing, different promotions, different customer experiences.
And what about their own delivery infrastructure? Kroger has invested heavily in their own delivery capabilities over the years. Are they essentially admitting that third-party platforms have won the delivery wars? Or is this just about meeting customers wherever they are, even if it means sharing revenue with multiple partners?
The Loyalty Program Crossover
The Boost-Uber One crossover is actually pretty clever. Each company gets to introduce their loyal customers to the other’s ecosystem. Kroger gets access to Uber’s typically younger, urban customer base, while Uber gets exposure to Kroger’s more mainstream grocery shoppers.
But here’s my question – does this actually create loyal customers, or just promotion-hoppers? When you offer extended free trials and cash back incentives, you might attract people who are just chasing deals rather than building genuine brand loyalty. Once the promotions end, do these customers stick around?
The Hidden Retail Media Angle
Don’t miss what Kroger’s Chief Digital Officer Yael Cosset mentioned about “more data to power our retail media business.” That’s probably the real prize here. Every Uber Eats order gives Kroger more insight into shopping behavior, which they can monetize through their growing retail media network.
Basically, they’re building a data flywheel – more delivery partnerships mean more customer touchpoints, which means more data, which means more valuable advertising inventory. It’s a smart play, but it also raises questions about how all these different data streams get integrated and whether customers understand how their shopping data is being used.
So while this Uber expansion looks like a simple delivery partnership on the surface, it’s really part of a much larger strategic recalibration. Kroger is betting that stores, partnerships, and data will drive their future more than automated warehouses. Whether that bet pays off… well, that’s the billion-dollar question.
