[gurumeditations]

Having FCs an hour away from your customers, packing groceries into a tiny truck with one or two employees per truck, the trucks alone would never pay for themselves let alone the FCs. This was obvious from the get go and it’s why Walmart has been the only one successfully doing grocery pickup and delivery for 6 years. Every store is an FC and they’re all within 20 minutes of their customers.

[sethhochberg]

There are examples of the warehouse-based model working, but they clearly require both density _and_ mindshare. Its not clear Kroger had either based on the other comments in here. FreshDirect in NYC has been operating since the early 2000s with a fleet of tiny trucks with a couple of employees in them and a giant FC with essentially zero retail footprint.

(As an aside, they also have some of the best meat and produce you can get in the city without going to a farmers market. So many retail grocery stores here lack loading docks, the food handling getting from the truck to the sidewalk to the basement of the store to the shelves is really, really rough especially during the summer months. Skipping that and going warehouse-to-home has advantages)