Kroger launches online delivery for Atlanta

ATLANTA -- Kroger has added Atlanta to the turf on which the battle of online food delivery is being fought.

The Cincinnati-based grocery chain has announced that its online service -- known as Kroger Ship -- is available in metro Atlanta. It is the fifth region in which Kroger now confronts e-commerce behemoths Walmart and Amazon.

"Our customers have been telling us they want different options as far as purchasing groceries," said Felix Turner, Atlanta-based Kroger spokesman. "This gives our customers another option."

Customers of Kroger Ship will pay a fee of $4.99 per order that's less than $35. Any grocery order more than $35 is free. The company also offers promotional deals for first-time customers.

Kroger nationally has 2,800 grocery stores, including 173 stores in Georgia employing nearly 28,000 people.

The company already offers online ordering and local delivery at many locations through Instacart. The new service would use Kroger employees, Turner said.

Kroger announced the service about a month ago, making it available in Cincinnati, Houston, Louisville and Nashville. Adding it in Atlanta is another step in what is becoming a national online retail free-for-all.

The company plans to add distribution centers, although at least for now they won't be in metro Atlanta, Turner said. "We want to get to areas where we are presently not located."

Kroger Ship orders for Atlanta-area customers will come from a distribution center in North Carolina. Delivery will take from one to three days, depending on where the customer lives, Turner said.

Kroger says its online orders are up 66 percent from a year ago. However, that does reflect growth from a relatively small starting point.

Amazon for years was in front of the pack, surging to dominate online shopping, benefiting without the burden of managing and paying for an entrenched network of "brick-and-mortar" stores.

But recently, analysts say big retailers have become more aggressive about using their stores in concert with their online business. Customers order online, go to pick up their merchandise in the store and often go on to buy more items once they are there.

"We definitely still want you to come through the store," Turner said.

Before long, the company could eventually imitate Amazon's much-hyped one-day service, he said. "That is probably in the works."

Kantar Worldpanel, a research group on consumer behavior, last year projected Americans will spend $59 billion a year on food and alcohol online within four years.

Kroger has moved aggressively this year on a number of issues. But analysts say it has shown it is serious about staying with -- or beating -- the e-commerce giants.

In May, Kroger purchased British-based Ocado, a company that has developed automated distribution centers to handle online orders. Some analysts thought the move might even allow Kroger to leapfrog both Walmart and Amazon.

Ocado and Kroger said they would build 20 new warehouses over the next three years.

The combination of offerings that Kroger now has gives the chain an advantage over smaller markets, Jefferies analyst Christopher Mandeville said, according to Supermarket News.

"This service should allow the company to better compete with online retailers and accelerate market share gains versus subscale operators unable to offer similar programs," he said.

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