Kroger faulted for use of centralized fulfillment centers

Cincinnati-based The Kroger Co. has been criticized by Jefferies, a financial services company, for investing in centralized fulfillment centers instead of micro-fulfillment.

According to CNBC, Jefferies analyst Christopher Mandeville said that the company should be following Walmart’s business strategy by investing in micro-fulfillment centers, because they utilize the space in or next to an existing store and are closer to urban areas, instead of centralized fulfillment centers.

Additionally, Mandeville believes that the company’s decision to invest in centralized fulfillment centers could be a multiyear mistake.

“We view Kroger’s centralized fulfillment center platform as a considerably more expensive, time-consuming model that carries higher risk in what is still a nascent market,” Mandeville wrote, reported by CNBC.

To read the CNBC article, click here.