How we know: Kroger's Nov. 18, 2025 press release, Ocado's stock-exchange filing the same day, and state layoff notices as reported by FOX 35 Orlando and USA Today.
RetailCase study
Kroger is closing three of its robot grocery warehouses and expects a $2.6 billion charge
The grocer says its Ocado-built network isn't meeting financial expectations. Three sites close in January, state notices cover more than 1,600 jobs, and orders move to stores and delivery apps.
From the archive. First announced by Kroger, November 2025. Where it stands now: Scaled back, as of July 2026, Ocado half-year results, Jul. 16, 2026. Why I saved this: About $2.6 billion in expected charges and three robot warehouses closing is what stands out to me. Kroger's own explanation is that the network wasn't meeting financial expectations.
November 2025 — Kroger, the Cincinnati-based grocery chain, signed with UK tech firm Ocado in 2018 and opened its first robot-run warehouse for online grocery orders in 2021. On Nov. 18, it said it would close three of them in January. Here's what changed, what it cost, and what went wrong.
Cost and outcome (as of November 2025)
- Expected charge: About $2.6 billion in impairment and related charges. (Kroger)
- Sites closing: Pleasant Prairie, Wis.; Frederick, Md.; Groveland, Fla., in January 2026. (Kroger)
- Sites staying: Five, in Monroe, Ohio; Dallas; Atlanta; Denver; and Detroit. (Ocado)
- Jobs: 1,403 in Florida, including 935 at Groveland (FOX 35); 211 at Pleasant Prairie (USA Today). No Maryland count reported.
- Expected payoff: About $400 million more eCommerce operating profit in 2026. (Kroger)
- Ocado's side: Expects more than $250 million in compensation and about $50 million less fee revenue in fiscal 2026. (Ocado)
The bet
Kroger and Ocado formed their partnership in May 2018, and the first site, in Monroe, Ohio, opened in 2021, Kroger said at the time. The plan was a network of customer fulfillment centers, or CFCs: big warehouses where robots running on a grid pick online grocery orders, which vans then deliver. Groveland alone is 375,000 square feet and opened in 2021, according to FOX 35.
By September 2025, Kroger had started a "site-by-site" review of the network, USA Today reported.
The decision
On Nov. 18, Kroger said it would close Pleasant Prairie, Frederick and Groveland in January. It expects about $2.6 billion in impairment and related charges "as a result of these closures and the automated fulfillment network not meeting financial expectations." An impairment is an accounting write-down: the company admits the assets are worth less than it paid.
Kroger's chairman and interim CEO, Ron Sargent, framed the move as a shift in how it serves online shoppers, not an exit from online grocery. It expects the change to add about $400 million to eCommerce operating profit in 2026.
What replaces the robots
Kroger said it will lean on its stores. It named Instacart its primary delivery partner, alongside DoorDash and Uber Eats, and said it will test "capital-light, store-based automation." That means smaller automated picking setups inside or near stores, not giant standalone warehouses.
Ocado's filing notes Kroger's statement that "in geographies where it sees higher density of demand," it will keep using automated fulfillment. Five sites stay open, and Ocado says it expects "significant growth" in the U.S., both with big sites and store-based automation.
Who carries the cost
The closures hit people working inside the sites and driving the vans. Florida layoff notices cover 1,403 jobs across Groveland and spoke sites, small hubs where orders are handed to delivery vans, in Jacksonville, Tampa and Rockledge. Employment ends Feb. 1, 2026, FOX 35 reported. A Wisconsin notice lists 211 jobs at Pleasant Prairie, according to USA Today. These are WARN notices, state filings that employers must make before mass layoffs.
Ocado takes a hit too. It said it expects compensation of more than $250 million from Kroger, but losing the three sites will cut its fees by about $50 million in its 2026 fiscal year.
Why it matters for operators
A dedicated automated warehouse is a bet on order volume. Kroger didn't single out the robots as the failure. It said the network wasn't meeting financial expectations, and it is keeping the five sites where it sees enough demand. For anyone weighing a big automated fulfillment center, the question is the same one Kroger faced: will enough orders run through it to cover the fixed cost?
What went wrong
- The network missed its numbers. Kroger's own release says the automated network was "not meeting financial expectations."
- Kroger expects to pay to stop. Ocado expects more than $250 million in compensation, on top of the write-downs.
- People are losing jobs. State notices cover more than 1,600 jobs in Florida and Wisconsin. No count has been reported for Frederick, Md.
- What we don't know yet: the final charge, the exact payment to Ocado, and what happens to the three buildings.
Our follow-up question for Kroger
How do the five remaining Ocado sites compare with store-based delivery on cost per order, and what volume does a site need to stay open?
Sources
- Kroger, “Kroger Evolves eCommerce Offerings to Improve the Customer Experience, Drive Profitable Sales Growth,” Nov. 18, 2025. ir.kroger.com
- Ocado Group, “Update on Kroger Partnership,” RNS, Nov. 18, 2025. data.fca.org.uk
- FOX 35 Orlando, Kroger Florida fulfillment center closures, Nov. 19, 2025. fox35orlando.com
- James Powel, “Kroger to close 3 automated fulfillment facilities across multiple US states,” *USA Today*, Nov. 18, 2025. usatoday.com
- Kroger, “Kroger Delivery Introduces America's First Customer Fulfillment Center,” April 14, 2021. ir.kroger.com
- Ocado Group, half-year results for the 26 weeks ended May 31, 2026, July 16, 2026. rns-pdf.londonstockexchange.com
© 2026 Real World Wire. Written October 25, 2026.