Kroger acknowledges that its bet on robotics went too far | Hacker News Reader

Kroger acknowledges that its bet on robotics went too far

grocerydive.com

276 pointsJumpCrisscross330 comments

I work in this exact space (online grocery retailer in Europe). We're profitable and one of the few companies to be so in the sector - many online divisions are losing money and being bankrolled by the parent company with physical stores. Alternatively, burning VC money.

The thing that's wrong with Ocado's technology is that it's ridiculously expensive and tailored for huge FC's (fulfillment centers). The problem with that is that it needs to serve a large population base to be effective and that's hard - in dense metros, the driving times are much longer despite smaller distances. In sparse metros, the distances are just too long. In our experience, the optimal FC size is 5-10K orders/day, maybe up to 20K/day in certain cases, but the core technology should certainly scale down profitably to 3-5K. Ocado solves for scaling up, what needs to be solved is actually scaling down.

There are a lot of logistical challenges outside the FC, especially last mile and you need to see the system as a whole, not just optimize one part to the detriment of all others.

> FC size is 5-10K orders/day, maybe up to 20K/day in certain cases, but the core technology should certainly scale down profitably to 3-5K.

deja-vu from the e-scooter business. even with a good product, its just not profitable/scalable enough

Ours is profitable enough. And it can scale but covering more area with FC's of a profitable size. Additionally, market penetration of online grocery shopping is growing rapidly and has no reasons (that we see) to stop growing (as a % of all grocery shopping).

The grocery business has razor thin margins. There is no dry sponge remaining to absorb this kind of massive fixed cost. The business is highly variable.

I think scaling up would be the only way out of this problem. Scaling down only makes it worse.

Or you sell every bit of data you collect.

We don't need to do that at all. Essentially zero. Whether we'll do it in the future - I don't know. It's not really under my control, but right now we can be profitable without needing it. And we're price-competitive with the large grocery stores.

No true for us at least. Well kind of - the scale I'm mentioning is required if you're doing your own tech like we do. We develop all our core tech - the website, the logistics operation automation, the last mile app and scheduling. If we can do that profitably, what do you think will happen a company like our develops a few FC's of similar scale using the same technology?

The margins are thin, but not as razor thin as you might think. The grocery stores have a lot of overhead that we don't. Additionally, people realize that not only is that the case, but they also save from their own costs - just driving to the store is not free, let alone the time you spend, which is massively cut down.

They literally copied their supplier ( autostore ).

Unfortunately, auto.ol shared secrets with them, Ocado abused that in court.

Literally, Fuck Ocado. I wouldn't trust them.

Some context: https://archive.ph/Apfdv

Autostore ended up paying Ocado? How did Ocado abuse them?

Yes, AutoStore lost most important cases in US (ITC) and UK's High Court.

Because autostore shared trade secrets with Ocado. The lawsuit was found to be not valid.

Note: Ocado was a customer of Autostore in 2012 and just copied them. Sharing IP basically invalidated the lawsuit.

https://www.blackstonechambers.com/news/autostore-technology...

Autostore disclosed their design externally before the patents. So the patents were "invalidated" by themselves

At least read what you’re posting:

AutoStore claimed that several of its European patents covering cube-storage robots and grid-based systems were infringed by Ocado’s Smart Platform robots and storage grid. The judge looked closely at the “central cavity” robot patents (EP 2 928 794 and EP 3 070 027) and two other related patents and compared them to earlier disclosures and designs. He found that the claimed inventions lacked novelty and/or an inventive step, meaning they did not add enough new technical idea over what was already publicly available, so the patents were revoked.

Additionally, even if the patents were not invalidated, the judge found that Ocado did not infringe them, even if they were valid. Specifically, Ocado’s robots and grid as actually built and used did not fall within the wording of AutoStore’s patent claims. The court concluded that, on proper claim construction, Ocado’s design did not use several key features required by the claims, so there was no infringement in any event.

This is all in the judgment.

Finally, Autostore had to pay Ocado $256M USD: https://www.therobotreport.com/autostore-to-pay-ocado-256m-i...

There's literally a picture on that page to compare Ocado vs their original supplier...

Let's say "heavily inspired" on instead of copied then.

Where are you operating? I live in a dense European city and I don't know a single person who orders groceries online. Smallish shops with bike racks in front of the door are simply too convenient, seems hard to beat. Next few days shopping can easily be done in 15mn on the way back home.

Maybe it's different in Europe, but at least in Australia you end up paying more at smaller shops, so I tend to avoid them. Is this the case in Europe as well?

Yes - groceries in a small shop are easily 2x the £/calorie in the UK compared to a big superstore.

Are you comparing the cost of strictly identical products or something else? I'd be very curious to have some sources if you have any

No - small shops tend to sell mostly expensive branded products in smaller packets, whereas superstores sell larger packs of unbranded products.

In my country and city the small shops are largely stocked from buying the same things from larger shops combined with their own resupplying network. So you can either walk 100m to the corner shop, pay couple dozen % extra or walk 500m to the nearest Lidl or similar and save on basically the same products.

I would think the sensitivity to this would depend a lot on family size. Shopping for just myself... it doesn't matter much. Shopping for a family of 4 would be very different.

For a first world country, Germany has ridiculously low food prices. These are found at the chain supermarkets (Aldi, Lidl, etc.). They tend to be small by American big box standards (perhaps 1000sqm, so maybe 3x the size of a bodega). There's a lot of these supermarkets everywhere in the country, most people can easily come across them during usual daily trips.

Yes shops in dense urban areas are overall more expensive but there are discount stores like Lidl too. For higher quality products the difference is marginal (if you can even find an equivalent in a big suburban store). Having experienced both, my feeling is that it evens out if you account for the running cost of a car used often or delivery.

That probably depends on the country and what you mean by small. Smaller shops/supermarkets in Denmark tend to be cheaper, because they are run mostly as discount brands, while the larger stores a premium brands and have the more expensive options.

However, Danish supermarkets are generally kept small by regulation, meaning that there are very few supermarket that could be considered big by international standards.

judging by his name, he is perhaps in Sofia. I am also living here, and can confirm that many middle class people order groceries online.

> Smallish shops with bike racks in front of the door are simply too convenient

Most people don't live in city centers. Because they are the most expensive places to live in.

You don't always need to be a city center to have this convenience, but you can't be in an area that is car centric... And usually when people compare the cost of both of these places, they only account for the cost per square meter of accommodation.

You don't need to be in a city centre for small shops with bike racks.

This is village with a population of a bit less than 3000, which I only know about because I have walked East-West across most of the state of Brandenburg (from Słubice in Poland to the city of Brandenburg) and this trains station was a convenient break point:

https://www.google.com/maps/@52.3459295,14.2800967,3a,60y,14...

Here's Aberystwyth, where I did my degree, population 13k, nearby villages boost that by about 6k, students by another 8k:

https://www.google.com/maps/@52.4145833,-4.0848806,3a,75y,19...

I grew up on the south coast of the UK. Which is certainly expensive overall, but it has cheap areas like Leigh Park which used to be entirely council houses (i.e. made for poor people and run by the local council):

https://www.google.com/maps/place/Leigh+Park,+Havant,+UK/@50...

One of those shows several cars in the photo and a single bike.

The other two show pedestrianised areas, and all three show pedestrians without any indication of how they go there. When I to to similar areas in my town (pop approx 23k) I have drive there, park, and then walk around.

I have several shops within easy walking distance and many people (including me) do walk to them, but quite a few drive. Few bikes (kids mostly) at shops although leisure cycling is VERY popular here.

One of the nice things about an edge of town area with its own identity as a village is we have a lot of local stuff which is walkable and friendly.

> One of those shows several cars in the photo and a single bike.

Yes, and? "Cars are popular" is not a surprising claim that anyone has been contradicting, so far as I can see. (Also, Aberystwyth is tiny enough to get around entirely on foot, and hilly enough that bikers have to be exceptionally fit, and yet despite this, bike racks).

> The other two show pedestrianised areas, and all three show pedestrians without any indication of how they go there.

The Edeka in Briesen is one of the other two, I don't see a pedestrianised area, do you mean the car park owing to the open-air market set up in it?

The other one (Leigh Park) is literally in the middle of a typical UK conurbation with, as is normal in the UK, approximately universal pedestrian access. People can walk there easily from their homes, they can cycle, they can drive, they might even take a bus. One thing they're really not likely to do is come from very far away, because the only people who know about Leigh Park are the adjacent parts of the conurbation and they mostly look up their noses at it because it's poor.

The claim was made further up the thread that "I don't know a single person who orders groceries online. Smallish shops with bike racks in front of the door are simply too convenient, seems hard to beat" and I interpreted your photos as supporting that claim.

My point is that it is not "shops with bike racks" that are the alternative to online groceries, it is a mix that definitely involves more use of cars than bikes, plus probably more walking and public transport than bikes too.

Ah, got it. I missed that interpretation of the surrounding context, that's fair. Looking back at the comment you mention, I see how it could be interpreted as either "e.g." or "exclusively" bikes.

To your point, I agree, it's definitely not just bikes: I could bike to my local stores, I actually walk most of the time. With the "e.g."/"exclusive" split: Back when I was commuting, I did so by bus and train, and would also often go via a shop on the way home. The Briesen example is close to the train station, so my guess is that many of the locals would do likewise.

I'd go further though, we do order online about once every 6-8 weeks, because bulk purchasing 18 litres of soy milk and another 9 of long-life cow milk that way is more convenient than frequent small purchases at the same time as the perishables.

The UK is strange, it's really not bike friendly but you do have rows of small shops outside of city centers and towns have many of them too. France is rather the opposite or simply worse on all aspects in the countryside.

The UK varies a lot. A lot of places are walkable so a mix of public transport (in cities) or car and parking and then walking are common.

I never had a car in London, and would not want to drive in central London. Public transport is faster, less tiring, and while not cheap, is cheaper than running a car.

Living in Cheshire a car is a necessity.

You'd get these in inner suburbs, too. And non-inner suburbs, for that matter.

In the London suburbs you see the grocery delivery vans out and about all day every day. It very much depends on the neighbourhood though, mostly the slightly posh mums or elderly ones ordering.

In the UK, but not in London, but my order online sometimes because local shops do not have everything I want, it takes time to drive into town and shop at a supermarket, so when I am busy I order online.

Like a lot of people who work from home there is big difference between the time required to shop, and taking a few minutes away from my desk to get some stuff from the door to the fridge.

I live in inner London. I have multiple grocery shops around me - within 10 minutes' walk I have a fishmonger, two butchers, two delicatessens, three bakeries, three greengrocers, four mid-sized organic/international grocers, six patisseries, a large Lidl, and a very large Sainsbury's supermarket.

I visit those local shops once or twice almost every day to pick up fresh bits and pieces - but I still get bulky or heavy stuff delivered by Ocado (toilet roll, washing powder, everyday wine, that sort of thing).

There is a gas station that sells candy and stale jerky, a hard, sidewalk-less 10 minutes walk from me (probably 20). Not sure it would be feasible to go anywhere else. -American

That's the thing, though - you'd think that this would result in these "heavyweight" Ocado-style home delivery options being more viable in the US than in London. And yet, they're not.

Sure, you have Doordash-style same-hour options which are largely based on someone picking stuff up from a local store on your behalf (we have lots of those too). But the Ocado/Kroger robotic hive fulfilment centres ought to be more efficient than that whilst offering higher quality by cutting out the labour-intensive warehouse -> store -> shelf -> checkout part of the process.

I think some of it comes from a feeling of "that can't possibly work", perhaps as a hangover from the failure of Webvan during the dotcom boom. Maybe with some "well, I have to use my car for everything else, so I might as well use it to collect groceries too" layered on top.

Which all points to it being a fairly intractable problem - there are a bunch of only tangentially-related issues that need sorting out before it can be become a widespread success.

Another possibility: For perishable goods in the sort of SKU counts typically offered, it can't work unless it has a certain minimum scale. Local supermarkets supported by a largely automated (and has been for 30 years) regional distribution center have that scale from walk-in traffic. A new delivery service using high-density storage could save on real estate and labor costs on the backend, but it has to have runway to replace a lot of the local market (which may take a decade), and the whole time you're scaling, these low-velocity SKUs are literally spoiling while these expensive, high-throughput robots are mostly idle. The frontend costs of delivery are a separate category of problem.

Replacing the regional distribution center instead with even higher levels of automation, and getting your groceries delivered from the same warehouse the supermarket is, would give you the scale from the start... but then that increases your frontend delivery costs and more importantly your frontend delivery latency; High latency is a much worse thing with milk than with books or hammers.

Sure, but that's a matter of raising capital - which, again, you would think would favour the US over the UK.

To be fair, though, the bulk of Ocado's initial investors were from the retail and finance worlds - and the difference between the US and UK is smaller in those fields than it is for tech.

When I go to visit the Midwest in the winter, the perishables are… non-existent.

More like 30!

You live in the suburbs, or a small turn, or a city?

How do people in your area generally get groceries?

Balancing out the other comment - there's two real supermarkets within a fifteen minute walk of me (another American). It's fun to leave meal planning up to whatever is on sale that night.

For people in the outer suburbs where that's not an option, I don't know why a service hasn't arisen where you can plug in, "we have X adults living here, they average Y meals per week made at home, we want Z grams of protein per meal, here's our dietary restrictions, solve that system of equations out of whatever's in your warehouse and take a flat rate for delivery and percentage for your overhead." The pure delivery services all seem to be plays to hide huge prices behind tricky introductory rates. Both my local supermarkets offer delivery and presumably have the data to make that possible but they want me to still pick individual items in a vastly worse interface (any website or app) than the experience of standing in a dry goods aisle.

You underestimate how hard people’s food preferences are. They are really locked into their set of brands for each item. Immigrants pay huge markups to just get the same brand of tomato paste or beans they know. These are some of the most commodity style food items

I live in a dense European city and all I ever do is order groceries online. I can order larger amounts in one go, so, batch order once every two weeks or so.

Instead of having to fight with a machine to give back my empty cans/plastic bottles, I can just give the delivery person a crate and get my money back.

Doesn't capture all my groceries, I love biking or walking to a smaller shop on occasion, or if I have a specific craving, but 90% of my groceries is delivery.

Berlin here, people order from bike delivery grocery stores all the time. Not necessarily to do your weekend shopping, but still.

Isn't this expensive after you factor in the extra margins and delivery costs?

Well, ish. German grocery prices are still quite low, comparatively. People use the delivery services not for full weekend shopping, more if you get home late and the fridge is empty, or a public holiday is coming up etc.

Still, they are popular.

Also, anecdotally they are more popular amongst less price sensitive people with disposable incomes, where paying for the convenience is worth it.

But also, definitely not the Ocado model.

I live in a not-so-dense European city (Bratislava) and several our neighbours here in the extended city centre order groceries online, although we have a small shop within 100m and supermarkets within 2km of driving. It's very convenient for parents staying at home, for example.

> I live in a dense European city and I don't know a single person who orders groceries online.

I live in the U.S. and have almost never used a service like Instacart. Also, when I see the item I’m trying to order in Amazon is fulfilled by Whole Foods, I typically don’t buy it, because of the additional cost.

I’d rather suffer a small amount of inconvenience to save several dollars on groceries, and often it may mean that I may need to order a different brand to pick up a similar item at a local store.

However, I’ll gladly pay a little additional money for Amazon for many other items, because it’s convenient, shipping is included in Prime, and because I can get what I want.

I make the majority of my retail purchases at a supermarket, followed by Amazon online (Prime only), then a very small percentage in-person at Target, Walmart, or a hardware/home supplies store or some random online retailer.

The best I can do to “shop local” is to use a supermarket chain; there is no mom-and-pop to support that isn’t a chain unless it’s a restaurant. I don’t pretend that this is actually “shopping locally”.

I’ve only participated in a boycott once or twice, because there is typically a practical reason for shopping when and where I do- either I need to shop then because I don’t get out much, or there’s a sale with actually lower prices, rather than the frequent “increase the price just to cut it to get you to order more” thing, which I also get sucked into, because I don’t have time to price shop, unless it’s with camelcamelcamel for Amazon.

Similar shopping story at our house, but I will observe that Home Depot has made amazing strides into competing with Amazon for delivery of items.

They’ll ship me a $10 <thing my project needs> almost always for free and often next day, sometimes same day. And their prices are competitive in general with Amazon and supplyhouse.com.

I don’t know that it’s a great (or even sustainable) offering from their business angle, but I love it as a consumer and DIYer!

I believe that HD (and Lowes) massively subsidizes their delivery ops simply because they don't want to cede the space to Amazon. It allows them to under-stock the stores but still maintain a reasonable range of products. However each time I have ordered, they have delivered a ~$2 part via Fedex, at no extra cost to me.

They are a bigger fish than the mom and pop stores but that just means that it will take a little longer for the Amazon Prime monopoly cash flow to devour it.

Reading these two comments is bizarre from my perspective. How is Amazon competitive with anything? They tend to have higher prices than other online retailers and the intransparent market place system tries to protect shady sellers with product focused reviews instead of seller based reviews. The moment you get even a single fake product or wrong delivery all the perceived savings evaporate at once.

The idea of paying a subscription for the privilege of being scammed sounds ridiculous. The cost of deliveries doesn't magically go down because you're paying a subscription. You're paying for it either way. Either you're overpaying on the subscription because you're not ordering enough or you're overpaying in the form of higher prices that contain the remaining delivery fee.

It's the all you can eat buffet effect. Pay the price and don't have to worry about shipping, can watch (some) streaming without having to worry about paying, and whatever else they decide to roll into their monopoly black hole today.

Sure, if you do a full accounting of costs you may win or lose, but fundamentally people are paying for simplicity. Because almost everyone is lazy, or too busy, or too afraid of random scammers, or whatever, and they played their cards right to become the Sears Catalog from the 19th century in the 21st century.

edit - and one thing that helped them get there is the return policy, so if you get one of those scam sellers, or they sent you wrong crap, opened crap, or just plain everyday crap, you press a couple buttons, maybe drop something off at a UPS store, and problem solved. That definitely shields them from the fallout from their endless listings from sellers like QWERTY123 and ZXCVBN789, and provides an advantage over any other online ordering that doesn't have the same massive advantage of scale.

For most everything I'm giving as Christmas gifts this year, Amazon has the best (often tied for the best) price. Things from Apple are cheaper on Amazon than from Apple (Airpods Pro 3, M4 Air, etc.)

Predictable delivery, easy/generous customer service, best/tied-for-best price, excellent selection. I'm not sure which part of that is uncompetitive...

(If you know a better price on Airpods 3 Pro or a base M4 Air, do let me know as I'm always happy to save money.)

In my experience, it varies. Amazon is competitive (usually) on high-volume stuff, but can be wildly overpriced in other cases.

I don't order from amazon enough to justify prime, but a few times a year I sign up for a free subscription for a couple weeks or so.

The prices on amazon are comparable to what I see elsewhere for everything I've ordered. The thing that sets amazon apart is that their delivery is blazing fast compared to everyone else. Yes, the reviews are always a little suspect, if I see tons of empty 5 star reviews, I suspect the product, but in general, I've been satisfied with my purchases.

> The moment you get even a single fake product or wrong delivery all the perceived savings evaporate at once.

I’ve been buying on Amazon for 20 years, and I just avoid high value items. It’s great as an AliExpress with an easy return policy. If I get a fake or whatever, I return it or I toss it.

For higher value items, I go to other retailers, such as Costco.

I buy from Amazon:

  1) When I really need it within a couple of days and can't quickly find it locally
  2) When it isn't carried locally (the local retail stock is a lot thinner than 20 years ago)
  3) If there is a BIG price difference -- used to be common but now much rarer. As you say, Amazon's prices are often worse than buying locally.
  4) When I need it shipped somewhere else. I usually spend Christmas, for example in another city, and it is impractical to bring a bunch of presents. Amazon is good for situations like that.

I dislike Amazon, but they are now so dominant it is hard to avoid them.

I've been scolded online for buying from Amazon. "Oh, if you look around enough you can get anything locally." I live in the Seattle area, and I certainly cannot get everything I want locally, unless by "locally" you mean taking an hour or two to drive a 40 mile round-trip to a suburb to the north. I know, of course, that Amazon is partly responsible for being unable to find some things locally, but if I want or need something and I can't get it here in town, yeah, I'm using Amazon.

This but on the other end. I've had literally thousands of pounds of material delivered for free from Home Depot. Sheet good weight adds up very quickly.

I dislike Home Depot's politics so much that I make a point of never going there.

In general, I prefer buying local, because it makes my community healthier -- more jobs, directly and indirectly, more options to buy something this afternoon if I really need it. But the reality is that many items are already very difficult to buy. Some of that was true 20 years ago, but it's gotten much worse.

I don't get anything delivered, but I almost exclusively use grocery pick up since so many stores near me went all or mostly self checkout.

Self checkout is fine for small trips, but expecting people to do so for a cart full of groceries is ridiculous. This trend started at walmart but has started moving up the chain to higher priced stores. I just flatly refuse to do the grocer's work for them when I'm not actually saving any money at checkout for doing so.

There are old, disabled, sick who rather by online than walk. Normally I walk about a mile to grocery store several times a week. But when sick Amazon fresh or whole food is the best price/quality/time option.

I find online grocery shopping shines for heavy and bulky things that are a huge pain to schlep home otherwise, especially stuff that lasts a while.

All juices/waters/beers/wines, paper towels, lots of oranges/grapefruits, cleaning products like bleach/detergent, etc. When they carry them up to your fourth-floor door it's just so much easier.

The smallish shops are good for stuff you can then easily carry in a bag by hand -- meat, veg, cheese, fresh bread.

If you are getting those things anyway, and only need small portions of the other, then why bother?

With the exception of "lots of oranges/grapefruits", you only need to get the things in the first list perhaps every 1-3 months + you generally don't have to worry about them selecting a bad box of paper towels or stale cleaning products vs every time something in that second list is "why did they even bother trying to deliver this to me" quality.

Because otherwise you'd have to do a lot more planning in advance.

For instance, I called in to the patisserie this morning on a whim to treat myself to a pain au chocolat for breakfast. And I think I fancy cheese for dinner, so after work I'll nip out to the deli for some stilton and the greengrocer for walnuts and figs to go with it. I've already got fancy crackers and some good port from my last online delivery so that's everything I need for dinner.

I'm used to being able to pick stuff up according to what I feel like eating on the day. Yeah, it wouldn't be a huge quality of life reduction to have to plan meals in advance but why bother if I don't have to?

Plus, when I'm working from home, it keeps me from being entirely sedentary on a miserable, drizzly winter's day when I might not otherwise have bothered leaving the house, so it has physical & mental health benefits too.

Not a European, but this rings true for me in the US. I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world. Endless deliveries actually make that worse. I started buying more things locally in part because of that.

It's also one of the reasons I don't really like working from home.

I'll go out and get something, in part, because it is less lonely and feels more attached to life, to the world.

When I was young, I worked in a couple of supermarkets. There were a lot of people who came in each day and bought one thing. Not because that's the one thing they needed that day, but because going to the supermarket was their only interaction with other human beings.

I was young, so I thought they were just poor planners. But there was this one guy who I knew would be in the dairy aisle at 4:35pm every day, and I started having his cup of yogurt ready for him when he walked through. It was he who explained to me why certain people were low-volume regulars.

I need to say you are totally living the life. Good on you.

Why bother with which? I don't understand the question.

Delivery is for less frequent things that last much longer.

Local ships are for more frequent things that spoil quickly.

And adding the heavier/bulkier things to my local trips, even in smaller quantities, just makes the bags too heavy and unwieldy in the end. I only have two hands. Plus it's way more expensive to buy paper towels as individual rolls than in packs of six.

I live literally five minutes walk from a decently sized supermarket, ten minutes from another, and ten minutes on the bus from a great big one. One of my neighbours still gets supermarket delivery. There seems to be some sort of market for it, anyway...

We use Costco delivery at my house because it’s 10-15min each way to go there plus an hour at the place shopping at best (long lines are common). With 2 kids you feel that time especially given how frequently you have to shop for groceries.

It’s a more limited selection but there’s plenty to choose from and I’m done picking out my groceries in five minutes. They magically show up at my door for very little extra cost and I don’t have to bicker with my kids about grabbing a bunch of random stuff either.

I’m not saying you’re wrong for feeling that way, but you’d be surprised how much work it is to go to a grocery store, no matter how close it is. It’s important to think about other factors here.

> I’m not saying you’re wrong for feeling that way

I mean I'm not feeling any particular way; I don't have a problem with the neighbours using it. I'm somewhat surprised that it makes sense for them, but each to their own. Myself, I just shop on the way home from work (my walk brings me past one of the supermarkets).

There appeared to be some tone/judgment in your previous comment but I guess I was mistaken!

>They magically show up at my door for very little extra cost

I find tipping for grocery delivery adds pretty significantly to the cost.

I save money because I have Costco executive membership which also gives me Instacart for cheap, so I put those savings into the tip. Nets out about the same plus several hours of my life aren’t spent at Costco every month.

Many of us enjoy shopping, at least enough that what we would pay for it isn't much of a deal.

Just talking about why some people would want to use delivery even if they live close that’s all. Personally I can do without the chaos of Costco ha plus I go in person to my local grocers plenty in between.

So that’s 10 mins round trip. How many times a week, plus the time it takes to pick and checkout.

I mean, I'm walking past it anyway on my way to the office or to the bus stop.

Right we are all different. I don’t want to bother time with walking inside and picking things out. I would rather spend time with my family. All those minutes add up. Some enjoy it, others find value in that time spent, some of us like myself don’t.

I have this conversation regularly with friends, family, coworkers...

And I've not yet been able to establish the right criteria to guess how a person is buying their groceries.

Location, age, income, number of people in the household, physical ability...

A single guy living in the city center with good income? Takes his car to go in big supermarket outside the city.

A family with four kids living in the suburbs? Goes everyday in the small shops.

I've found two very general personality criteria for online ordering.

Planners. The people who have a meal plan in Google Calendar for the next week and rarely have to "grab one thing on the way home from the store". The people who literally have no idea what they're eating on Thursday will go to the store today or tomorrow, who knows what they'll buy.

Multitaskers. The people who do their grocery shopping on the couch while not really watching TV, or similar downtime when its job #2. I used to shop online while theoretically cooking. It'll be five minutes until this is done I'll spend a couple minutes looking in the fridge for eggs / milk / etc and add to next weeks order.

A specific criteria I've found is people in general don't trust the delivery services for non-hyperprocessed food. I can trust a sealed bag of oreos is like every other mass produced food-adjacent substance. I want to select my own roast from whats on the shelf or my own apples. So people who only eat processed food products that come in plastic tend to like online ordering, people who mostly eat more natural food tend to dislike online ordering.

You have to know people pretty well to determine their project management style and their diet.

I don't think that works either. I'm not a meal planner, but I will usually just make do with food I've already bought. Nothing appeals? I might eat cheese toast or yogurt.

That's interesting.

I'm a planner and that's one of the reasons I don't order my groceries. If there's one thing I know I can't rely on, it's to be delivered on schedule and/or receiving exactly what I ordered.

Meanwhile if I go to the store, I can find an alternative or go elsewhere if I can't find what I wanted.

And I'm also a "natural food" person, so I'd rather pick things myself. Furthermore, if I crush a fruit on my way home, it's on me and I'll deal with it peacefully. If I'm being delivered a crush fruit, I'll get mad at the company I ordered from and I'll have find a way to be compensated.

At least for me. I buy fresh food via online ordering because I hate wasting time these days. Driving even to a nearby store takes 10mins round trip. Then having to walk through the store and fine what I need and checkout. I would much rather order online and get it delivered. Produce can still be a gamble, pickers have no incentive to pick the best produce but for the average meal, that’s fine.

We have mapped the planet, yet no grocery has a freaking map to find what you need.

That’s mostly my problem. Some of the apps have locations, often I find things not there. But for most stores they want you to wander and shop.

Though I don't like shopping at Walmart, I still have to (no store in my area, even "supercenters," has everything I need), and their phone app is absolutely stellar at telling me where a particular product is. Especially handy where there's no staff on the floor (as often happens).

That's intentional. Grocery stores are laid out to encourage you to spend more.

Like almost everything people complain about nowadays, this is not a tech problem, has never been a tech problem, and cannot be fixed with tech.

Third parties with tech could fix it.

Is this a US thing?

I think here in France the best example is Lidl. The stores are laid out the same, so not only your usual store doesn't change, but you can go to any store in the country and find what you want at the same spot.

Personally, with self-checkout, I spend less than 15mn in the store to do a week of groceries.

Not sure if it is just a US thing but it to add a little more depth. Most stores as already stated want you to wander a bit to possibly purchase more things but the other piece is most stores custom to local preferences both on what they carry and where it’s located.

Thought differently most major chains capture all of this data and can optimize stores for sales.

I think the bigger complaint is a typical US grocery store carries an insane amount of SKUs. If I was just going to Trader Joe’s it’s no problem. Low sku count layouts never change. Walmart has probably 10x the skus and it’s a struggle sometimes just finding what you want. Oh I need dry dill, well in the spice section there are 3 or 4 brands. Within those sometimes it’s not in alphabetical order. Things are misplaced or just out of stock.

When I was a kid, 30 years ago, some grocery stores did have an aisle guide printed on the cart. I haven't seen one recently, but they at least did exist.

> Ocado solves for scaling up, what needs to be solved is actually scaling down.

This has been solved by Pio (by AutoStore)

Autostore is great, but it's a small component for a business to be profitable end-to-end. Maybe 20% of the whole thing.

I see Ocado vans driving up to deliver on the Isle of Skye, which I guess must come from either Fort William or Inverness.

I can't imagine it's especially profitable to deliver a bag of food in a refrigerated van to somewhere that's nearly four hours driving each way.

I'd guess that they make a loss on this, but that they accept some losses in exchange for being able to say "we cover the whole country!" This is the case for pretty much any delivery business.

Meanwhile the AirBnB dwellers continue to not spend a penny locally while taking up valuable housing.

They're actually worse than the motorhome brigade.

I think there's a space for something in between Ocado and Uber Eats, in the 2010s I worked for a startup where you could book an Ocado style delivery slot for the next day from a bunch of different butchers, bakers, etc and then we'd send a van round to collect from all of them and deliver it to you. Annoyingly they ran out of money just a little bit too soon, I'm pretty sure if they'd managed to hold out until 2020 they'd have seen a huge increase in sales as everyone fully got on board with online delivery and been laughing.

I think the big win with that model vs Ocado is that scaling down is fine, you work with whatever shops are in the area and don't need to deal with building fulfilment centres. Maybe you need a car park somewhere to put the vans overnight. Scaling up is a case of moving into different areas, or onboarding new shops. Absolutely agreed that last mile is a nightmare but we mostly had it down I think, the biggest pain there was that we were relying on a bunch of third parties to pack an order, and if any of them got something wrong we ended up with an unhappy customer on the phone and needing to deal with it.

VC reinvents the milk man (who used to deliver much more than just milk.)

Our milk man still delivers a lot more than just milk.

>the biggest pain there was that we were relying on a bunch of third parties to pack an order, and if any of them got something wrong we ended up with an unhappy customer on the phone and needing to deal with it.

Why not have drivers verify the order with the store? Like have the store folks walk through the pick ups. It might be slower up front, but it would save lots of time and money for everyone in the long run. One of those slow is smooth and smooth is fast situations. Alternatively, the drivers should have a book they could match pics to items perhaps

The other thing I wonder if it would be possible, would be to reduce revenue share for stores that routinely had issues with accuracy, but that means you'd need leverage, and you simply may not have it.

I stopped using Doordash because they had absolutely no process to ensure drivers picked up the correct person's order, let alone actually making sure orders are correct. You give me another person's order with completely different things - I don't trust you again.

This is one of the most basic functions that a delivery service should have: making sure that you get the items you ordered, in good shape.

I worked in this business for over 15 years on the tech and business sides and I can say that the traditional VC-funded startup regime is fundamentally incompatible with the basic realities of the food industry. What is sort of funny about it is that in many areas there are local companies that have been around for many years doing this fantastically. As other commenters pointed out, this is essentially the milkman model.

There are a number of extremely difficult problems that are definitionally insurmountable on the timescales that VC operates -- paramount among them being the establishment of trust and mutualistic relationships with your vendors/stores, customers, and employees.

You are right that there is such a space, it just won't happen in the context of a startup taking VC cash.

You're absolutely right on that - what eventually killed the business was an influx of VC cash and demands for massive expansion during a period when we almost had delivering in a single city nailed.

FC's can have very efficient fundamentals if done right. Sharing shops with direct customers is very problematic - while appealing, the scaling just doen't work for them very well. They're also subject to a lot of variability due to contention with said customers.

This is why next day delivery slots worked - shops were able to pack orders during quiet periods rather than suddenly getting slammed with delivery orders that will be picked up in 20 minutes just as the lunch rush arrives. Some of the shops we were delivering for had people they employed specifically to do this, and generally they loved it because it meant their staff were doing something during otherwise quiet periods.

Next day slots generally work for few customers. We offer delivery in the next 3-4 hours (unless demand is crazy) and the difference in demand when you offer 3-4 hours and when you offer next day is HUGE.

So who's their target customer? Are we talking about Amazon/Temu scale here?

Seems so, but the economics for groceries don't work like that since you don't ship a slice of meat and a bottle of milk like you ship a 512GB SD card or a smartphone.

I've done a few projects in (traditional, not pure ecommerce) retail, and in my experience it is a very low margin business.

This contrasts sharply with being an innovator in the robotics space, which typically is extremely capital intensive with very long ROI trajectories.

We're proving that automation can happen in that space profitably if done right - carefully, surgically and with a small, focused team. There's Autostore in that space and that system has a massively different economics than Ocado's solution, despite the similarities.

So, what you're doing? Sounds great!

Right now we're doing two robotic arms and a lot of conveyor belts - some conveyors serve as just transport, others storage of order totes and some others serve a dual purpose (they move the totes but due to the length we let them buffer for a bit). Additionally, a lot of software automation to help people.

Hey @karamanolev,

Do you work at Ocado? Ever thought of working in AV? We're a young startup in SF, have a couple customers, just raised our seed, and are now expanding our team with some very critical high-ownership founding engineers.

Some info about us: https://crewline.ai/ https://crewline.ai/blog/crewline-manifesto

LMK if this is of interest. -Freddie freddie@crewline.ai

Automation in in logistics and warehousing has been happening extensively for decades. However, with margins in large scale grocery retail are often far below 5%, any significant investment in unproven innovation will impact profits in a way that will be extremely noticeable to boards and shareholders.

This isnot to say it can not be done, as clearly the other side of the coin is that operational efficiency gains are also much more noticeable on the bottom line than in higher margined businesses, but it is higher risk/reward for low margin sectors. This will favor developing/proving the early TRL stages in new entrant or niche players, then buying out the successes when they hit early maturity.

Does low margin matter? If you are replacing paid people, arent you trying to replace that cost part of the equation?

love ocado purely for the reason it's cheaper than other services. i suspect they are subsidising each order to build long term customer behaviour but it's a gamble when customers can eadily switch as the moat is purely pricing

Sounds like they just put them in the wrong places.

> Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw.

> “Ultimately those were hard places to make this model work,” said Fenyo. “You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them. And so ultimately, these large centers were just not processing enough orders to pay for all that technology investment you had to make.”

But I think in the cities Kroger grocery stores serve as the fulfilment centers, so they don't need robotic ones.

There's probably still room for automation, but it might have to be different than warehouse automation.

It depends on your business model.

If a basket of groceries brought online costs $15 more than the in-store prices, then you can pick in-store profitably, very easy. That's the instacart model.

But if a basket of groceries brought online costs about the same as buying in-store? With the retailer bearing the costs of picking, packing and delivery instead of the customer?

Well then you need something more efficient than a store.

Even $15 more isn’t enough on account of delivery time, transpo costs, driver time, picking items, and bagging. Current model is for drivers to subsidize by being tricked into taking unprofitable orders.

From what I've seen, for grocery the model is they'll give you the least desirable or near expired stock that the walk-in customers won't grab. So they're basically saving spoilage. This happens so reliably I'm absolutely convinced this is how they 'pay' for it without raising prices.

I've also noticed this with hardware stores like Lowes. If I place a pickup order they more often than not will pawn off on me their broken, returned, or even used and damaged stock. Items like building wrap will have soil and rips on it, concrete mix will be spoiled from moisture, lumber will be all the most warped pieces (if you don't order a whole pallet, expect every last piece of fractional pallet will be knotted to hell, split, twisted, and badly warped), plumbing valves will be open package and leaky, etc etc. It's like clockwork, even if the stock sitting on the shelf doesn't have these problems. Due to this there are some stores I will never do a pickup/delivery order from.

Here in the UK it's common for online grocery sites to say "fresh for at least X days" on every item, so bread will usually say 5 days, eggs 7 days etc etc. Doesn't matter if I select collection(so someone is picking those items for me at the store) or delivery(so they come from a larger warehouse). They stick to that promise.

An example of my experiences: you’ll get the apple with the bruise and maybe some damage instead of the nice one you’d pick out if you’re shopping for yourself.

A counter-example - with a weekly shopping list way too long (family of 4), its hard for the husband to pick up all items as fresh as possible and do all necessary checks on each of them. Or in other words - even people themselves do make same mistake, I certainly do.

People will forgive themselves for saving money, but will not forgive others at the delivery service for charging extra.

There is no delivery service that's cheaper and good enough, or dirt cheap and expected to be awful, but those are large profitable retail operations. The only sector offered is more expensive, which annoys people if they occasionally get a below average item while also paying a lot more.

Delivery is for people who buy tenderloin not ground chuck and they get MAD when their tenderloin isn't perfect.

That's my experience, too. Also the dented tin and the miniature mango. And, if the order is arriving at 10pm, the salad best before midnight.

If Kroger operates the same was as Ocado does in the UK, then the drivers are paid by the hour, with the company providing the van and fuel.

Agree a lot of modern delivery businesses involve "self-employed" drivers getting paid a pittance and using their own vehicle and fuel, though.

And how about charging more in store than online?

On two separate occasions, I stopped by Walmart recently and spent $0.50 extra and $1.50 extra by walking in, going to the aisle, and picking up the item myself.

The Walmart app even tells you that the price on the app is only for online orders. But I didn’t want to wait for an unknown amount of time for a Walmart employee to bring it out to my car (been more than 10 to 15min a few times).

So basically, I pay extra to avoid that volatility in time to run that errand, and I do more work for it.

I'm not sure they want us in the store anymore.

And I'm glad to stay outside.

Yep. Wal-Mart has been that way for years now.

I rarely shop at Wal-Mart. There's only a few things that I buy there.

One of those things is motor oil: Their online pricing for 5 quarts of full-synthetic whatever is usually impossible to beat.

The only catch is that you have to go to the store, park outside, and wait for someone to bring it out. Going inside the store to buy it in person often costs several dollars more (and those dollars count towards the next cheeseburger).

It seems completely asinine for it to be this way, and I feel completely silly waiting outside for someone to bring me a single jug of motor oil and hand it to me through my car window, but it's very clear that they don't want me in the store.

And I'm cheap. So I play their game and let them do it for me.

(It's usually very fast for me, so there's that.)

And how about charging more in store than online?

I find your Wal-Mart anecdote interesting, because the chain supermarket that I use is the exact opposite.

I buy the same items from the same store every two weeks (then supplement at neighborhood stores). Sometimes I shop in-store, and sometimes I get delivery. But the two-week shopping list is so unchanging that I even use the shopping list on the delivery web site when I'm walking through the aisles.

Because of this, I notice that the supermarket charges more for products being delivered than those retrieved in-store. Sometimes it's enough that I'll text my wife a picture of the price tag in the store, followed by a screenshot from the store's delivery web site.

Recently from memory, a 12-pack of ginger ale was about $3 more for delivery than in the store. But I'd say overall, probably 80% of the items I buy regularly are cheaper in the store.

These days, I only get things delivered if I have other significant obligations that warrant paying a 10% delivery markup, plus the delivery fee, plus a tip.

I think the price discrepancy between in-store and delivery is the reason that so many supermarkets I've been to recently (and also Macy's) have zero cell phone service under their roofs.

Kroger placed one of the sites in Orlando to also service Tampa and Jacksonville when they have 0 regular stores in the entire state. They were trying to use it to expand into the area, but I never saw very much in terms of advertising or promotions to drive demand but it could have also been that the robots were so bad that they couldn't attempt to market and push volume.

I lived in Jacksonville for most of my life, and near the end of my tenure I started noticing the Kroger trucks. They were coming all the way from Orlando? That's like a two hour drive for cold groceries, feels expensive.

(i do recall the chatter that this was their way to compete with publix, although I don't know anyone who actually used it.)

Using a retail store for fulfillment means orders are accepted for items that are out of stock. the ordering system doesn't have reliable inventory info. Then the customer gets a partial shipment. This is the curse of Safeway grocery ordering.

“Never underestimate the bandwidth of a station wagon full of tapes hurtling down the highway”

In the AI analogy, never underestimate the productivity of a human when dealing with a giant pile of groceries. You can throw all the AI and robots you can at something but sometimes a $20 an hour human picking from stacks of goods and produce simply destroys it in raw economics

That’s not really what the article implies, at all.

They literally went too far…

I idly wonder if what would actually make sense here is a hybrid model that combines a gigantic fulfillment center with tens of thousands of products located "far" from people, with a large physical footprint and near to road/rail arteries, but with a mid-bandwidth, high-granularity, low-latency physical link to "near" places.

For example, imagine you had an upscaled pneumatic tube system (don't get hung up on the exact implementation, it could be a small gauge train system or conveyer belt: whatever floats your Factorio-addled boat) with a diameter around, say, half a metre to a metre, packed goods into canisters and shot into town where they pop out at local distribution centres for pickup or last-mile delivery.

This is where I thought the Boring Company might be going back before it was obvious it was an anti-public transit gambit.

Possibly the curse of rail systems applies where the maintenance of the track (tube) costs so much that it's cheaper to fly (done delivery) or drive all the way on public roads (current solution). The advantage over rail is that the land footprint is very small: the tract is about a metre wide and can be buried if needed. Perhaps it's just not really different enough to trucking it all into town using semi trailers, which would still be required for large items and especially construction materials.

Then again, even if this hare-brained system were to work, this assumes we actually want to continue to reduce most human commercial interactions to gigantic, remote, anonymous capital-intensive megasystems producing pods that pop out of the ground into robotic vending stations.

Buried anything is just horrendously expensive. Partly because of other things that are already buried.

Sure, but "we're going to cut the costs of horizontal drilling to a tiny fraction" was the Boring Company's original stated goal. And not all of it does need to be underground.

Even if it was a good idea (which I doubt, it's just a idle thought), I don't think there's a practical way to retrofit such a system in existing cities due to the costs, planning and presumably private funding for a non-public network, because the public road system exists, needs to continue to exist for large items and can be used for virtually free in comparison. So if/when the depot-to-neighbourhood leg is automated, it's much more likely we'll see drone vehicles on the road or occasionally in the air instead of dedicated pipeline-like delivery systems.

Even without the pipeline, you can conceive of self-diving heavy vehicles pulling up next to local delivery hubs and disgorging thousands of shipping pods into a robotic receiver. From there they either get picked up, droned, Starship'ed, cycled, whatever to the eventual front door. It's still possible just having then self-drive right to the door would turn out cheaper.

Sounds very sterile as an experience, but really it's only an optimisation of the small, but highly distributed, remaining segment of inefficiency in the existing global machine that already converts raw materials to a widget or food and gets it to within 100 miles of your house.

> Sure, but "we're going to cut the costs of horizontal drilling to a tiny fraction" was the Boring Company's original stated goal.

Sounds like the sort of idea a con man would pitch. Oh wait...

To be fair, he did do that for kilos to orbit via reusable rocket, so there was a moment when everyone went "hmm maybe there is a TBM equivalent of the Falcon 9".

But presumably it turned out that actually Herrenknecht and Hitachi aren't stupid, whereas, say, Boeing had been leaving opportunity for radical cost reduction on the table.

There existed a well known path for reducing costs to orbit, and the market was non-competitive and highly non-optimized for decades. One single company made a single experiment in that path, and it was somewhere on the middle between success and failure.

That's not the case for drilling. The Boring Company has no clear proposition about how they would reduce their costs.

This is pretty much exactly what Ocado already do, at least in the UK.

They have 4 CFCs and 15-20 "spokes".

Yeah, because arguably the main advantage of Ocado's warehouse is that it's extremely dense: you can pack a lot of storage in a very small area and still access it reasonably efficiently. But this only matters if space is at a premium, like near towns and cities (and for low-margin deliveries, you want your drivers to not have to go very far to your customers).

I had a wonderful retro futuristic dream about an automated Costco warehouse a few weeks ago. It was one of the less weird dreams so I still remember it clearly.

Basically, each section is like a closed areas with some windows. Customers order at the computers by the windows and flash their membership cards. Robots glide left and right to move 10 samples to the customer, in an arm with rotating clips. Customers can press a button to rotate the samples, observe them, and place an order by pressing a button. Samples not chosen are temporarily stocked at the window as a “stack”.

In each closed section, there are humans who monitors and maintains the robots, and occasionally fetch samples when robots stop working (hopefully it too often, you know those 9s).

At the exit, a human worker assembles the packages and hand them to the customers with a smile. Customers have a last chance to return unwanted items.

Why was it a retro futuristic dream? Because the customers have the option to go into a bakery to enjoy a cup of coffee/tea, some cake and socialize with fellow customers. All of them looked like the men and women from advertisement from Fallout 4.

I’d like to shop or even help build one of these.

Sounds like a lot of waiting around, versus just browsing the aisles. Maybe today’s consumers need to rediscover cash-and-carry, though.

In the dream customers just walk around and make orders. It’s actually old style I think, but with robots. Yeah it’s a bit like cash and carry, but customers didn’t move into the sections. They just get to browse the samples robots carried to them.

TBH, now that I think about it, the dream was way more vague than what I described in the reply. My brain probably reasoned about the idea subconsciously.

Something like this?

https://www.untappedcities.com/automats-cafeterias-nyc/

Yeah, something like this.

The only exception in warehouse was the cafeteria. I guess my brain wanted to make something retro futuristic so it made the cafeteria “retro” — manned by humans and cooked by humans too. There were even balloons inside now that I recall…

Sounds like the old general store model, you didn’t browse yourself, the shop keep would bring out what you wanted, it was always behind the counter. I experienced this in China when I started visiting in 1999/early 2000s, it’s mostly not like that anymore though. You still have department stores where you need to buy things first before touching them, though.

Had a large-format (for its time) chain store in Canada like that until 1996: https://www.tvo.org/article/what-happened-to-consumers-distr...

Basically a catalogue store without shipping to your door.

Oh Service Merchandise was a thing in the USA also, where I was living at in Mississippi at least. It was basically catalog focused store with a showroom.

IKEA is kind of like that also, but you have to get everything yourself after picking it out upstairs. And Sears might have been like this at some point before I was born.

Reading the history of Consumers (thanks, I never knew this existed):

>In the 1990s, Consumers Distributing struggled to compete with Zellers and then Walmart Canada. Consumers Distributing sought bankruptcy protection in 1996.

And Zellers went under just a few years ago...

Sorry to say but 2013 was more than a few years ago...

Oh I must have some bad memory unit…

I had hair when Zellers went under

Argos in the UK was similar. You would go into the store and look up the product in a catalog. Then go to counter and order it, wait 2-5 minutes and they give you the product. I found it quite convenient.

They still exist. Tend to be pretty competitive on price, although they must be losing out to online shopping in a lot of places since they don't offer any showroom advantage.

In my experience because you're picking up from the Argos you can do an instant return if you realize you ordered wrong (or the item is rubbish). Not perfect but a good way to get your hands on the product with an easy refund option

Screwfix do this too. Just a counter with a handful of staff who go and get your items.

If you pre-order it's waiting at the desk. Very handy for people who can order from the job site on the account and send the lad round to grab it.

And a (relatively) unshittified website too because if jobbing tradies can't use the damn thing because it's too loaded down with ads and bullshit, they just won't.

Screwfix is an all-round excellent consumer experience, for DIY or trade. The reviews on the website are often hilarious as well.

They're still there. Was surprised to run into one recently when I was in London (they pulled out of Ireland a while back, and I'd assumed they'd just closed totally at that point, because it _does_ feel like an increasingly marginalised business model.)

Little bit more specialized, but Lee Valley Tools [https://www.leevalley.com/en-ca] stores seem to still operate this way. Showroom (and a few computer kiosks) and order forms up front, then line up for them to pull the items from the back.

Most of small town India is this. Small store, one person, usually owner or their family member, doing everything.

Indeed. Always handy if you needed four candles.

You'll obviously buy fewer things that way, and I can't see that making business sense.

Yeah, that could be true. I'm not sure how many people are similar to me, who are allergic to "window shopping" and just want to buy, pay and exit. My Costco session is less than 30 minutes (from parking to back to car) in average.

I do research price, though, so if they show a big DISCOUNT sign and is more or less honest with it, I'll probably grab some, too.

You’ve just described B&H in New York City.

Now I'm picturing Hasidic robots.

Being pushed about on trolleys and puppeteered by gentiles every Shabbat?

You've reinvented the Soviet grocery store, but with robots instead of people and with a $7 cup of coffee.

I remember those stores as I came from a similar background. One vital difference is that they all have workers who have a straight face and don’t give it a fuck about customer service.

Then in the 90s they were all washed away by the new ones.

What you've re-invented is Keydoozle, from 1937.[1] This was the first automated grocery store. Three stores were opened, but there were enough mechanical problems that it didn't work well.

[1] https://rarehistoricalphotos.com/keedoozle-automated-store-p...

Incredible, they were 75 years ahead of their time.

That kinda stuff is why I'm an incrementalist, as opposed to "Great Man" theories of civilization. A big impressive product or leap-forward is mostly luck and thousands of cascading preconditions on small improvements everywhere else, and often not even the first person to try.

It's not hard to imagine that if a fundamentally similar store today that took the world by storm, there would be a profusion of news stories asserting that the founder is a genius visionary, with nary a peep for Clarence Saunders et al.

But if the technology is not ready to be implemented yet, was it really a genius level idea?

Here’s my idea: instant teleportation.

I expect to be credited

I think that's kind of the point: there are no "genius ideas", at least not at the level and frequency popularly portrayed. If teleportation isn't feasible then the idea isn't genius. If teleportation is feasible, then using it for transporting humans isn't genius, it's incredibly obvious.

Or to give a real-world example: The Wright brothers did some great work on making aircraft steerable and doing wind-tunnel tests, but working planes were mostly a product of ICE engines finally reaching sufficient power-to-weight ratios, not of the Wright brothers being unique geniuses. In a long line of people trying to build heavier-than-air aircraft they were simply the first to have access to the necessary technology to make it work

Wow, this man was decades ahead of his time. My hat off.

Thank you for that rabbit hole. Interesting that the same guy gave us both of the present day shopping systems just one was too far ahead

And what some of us might not have the context for, is that grocery stores at the time were usually clerk-serviced; Just like you don't pump your own gas in New Jersey, at the time the norm was that you handed the clerk a list of products and they fetched them from the shelves for you.

Arguably this model has a great deal of compatibility with robotic compact storage, especially in high-land-value areas.

And surprisingly, it was actually Piggly Wiggly that was the first grocery store to open up their warehouse and allow customers to self-service! [1]

> Piggly Wiggly was the first self-service grocery store.

[1] https://en.wikipedia.org/wiki/Piggly_Wiggly#History

And both PW and Keedoozle were launched by Clarence Saunders (touched on in the history link you give, more under his bio page):

<https://en.wikipedia.org/wiki/Clarence_Saunders>

There were also automats, automated restaurants serving all food through a vending machine (or more accurately, wall). Classically all for a single fixed price (a nickle).

These are featured in several cultural references, such as the 1962 Delbert Mann film That Touch of Mink, and PDQ Bach's "Concerto for Horn and Hardart" (being named after a prominent New York City automat chain).

Mink: <https://yewtu.be/watch?v=Y3GXMB4VPY8>

Concerto: <https://yewtu.be/watch?v=NT6bxlnS1Is>

That was Best store in the 1980s

https://en.wikipedia.org/wiki/Best_Products

In my home town, they tore the Best down and replaced it with a Best Buy, which was very confusing.

If you wish to experience more futuristic fever dreams, I present the Dahir Insaat YouTube channel:

https://m.youtube.com/watch?v=Xc_6wfDYuFU

That sounds truly terrible.

This is a failure of business model and logistics, not a failure of the robotics.

> Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw.

They over-spent on automating low-volume FCs. You could draw comparisons to Amdahl's law, they optimised the bit that wasn't the issue, the real issue was delivery distances and times.

Ocado has had good success with the robotics approach in the UK, because the UK is very high density compared to a lot of the US. Plus Ocado put a lot of work into creating good delivery routes, whereas it sounds like that wasn't a component of the automation stack that Kroger bought.

I think we are mixing up two things here.

Robotics for picking and the general feasibility of grocery delivery in the US.

Ocado is good because their stock levels are far more accurate than the other supermarkets for online ordering, so you don't get as many substituted/missing items. This is sort of a side effect of having dedicated picking facilities Vs "real" supermarkets. I would not be surprised if they "lose" less stock as well compared to in supermarket fulfillment.

Then you have "is online grocery good in the US"? There's a lot of areas of the US that have reasonable density for this kind of service imo, and the road infrastructure is generally far superior to the UK which negates any loss of density (as you care about time between deliveries, not distance per se). I imagine the much better parking options in most suburbs in the US also helps efficiency (it's an absolute nightmare for a lot of the online delivery cos when there isn't off street parking in the UK and they have to park pretty far from the drop).

It sounds to me that Kroger just messed up the execution of this in terms of "marketing" more than anything.

> failure of business model and logistics

Just the model. They optimized for tax outcomes. They obviously wanted in on the "Amazon race to the bottom" game.

https://www.leesburg-news.com/2025/11/30/kroger-took-incenti...

> the real issue was delivery distances and times.

Which they could care less about. Where else are you going to go?

It's even explained in the article:

> You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them

It's clearly not a technology problem, but it was made worse by heavily investing in robotics for locations that already couldn't sustain a fulfillment center.

I've always said that in the back of my mind, the most successful grocery store would be the 'walls' of the store -- bakery, deli, produce, meats, floral, cheeses, dairy and having a little selection of store brands in the middle where consumers can pick up (and vendors can pay a premium for endcap space, because they're the only non-branded products out there), with the rest of the SKU's behind the walls of the grocery store in a fulfillment only model.

Kroger should have pulled a Wal-Mart and turned to their shrink-heavy stores in urban centers to online fulfillment only -- basically only their delivery drivers can retrieve items for an order, and everything's shopped by an associate (Look south of the MicroCenter in Dallas if you want to see what one looks like: it still has the Murphy USA in the parking lot and is basically an unbranded walmart building with 'driver' and 'associate' entrances -- and then deployed the robotics there: less retail space, more online/fulfillment capacity (have humans grab produce and custom sliced/packed items, robots pick the dry goods), and while you lose some cashier jobs, you'll probably have net improvement in terms of time waiting to be picked.

So what grocery stores used to be ~90 years ago, when the norm was you would give the clerk a list and they would grab your items from the back? The only stores I'm still aware of that are setup like this are auto parts stores, where 90% of the inventory is in the back.

Only other places I can think of is weed dispensaries and pharmacies.

You could also count shoe stores and high-end jewelry and watch stores in that the clerk has to go in the back to fetch the non-display model.

In the UK you have a whole chain of stores called Argos where you have a catalogue of items, you pick the items you want and the clerk brings them to you. Also Screwfix and Toolstation are both hardware stores that operate the same way.

Professional supply houses are usually that way, too.

Graybar[1], for instance: There's a counter with bar stools, and behind that counter are people who know their inventory very well.

I just walk in and tell them what I want. They write it all down on paper faster than I can say the words and then disappear into the back to fetch it while I help myself to a free ice cream sandwich from the freezer over on the right that one of the local trade unions provides.

[1]: Graybar is a US-based electrical supply place. The companies I work for have accounts there, but as far as I know anyone can walk in and buy stuff. They also have some datacom stuff. If I'm in the middle of Nowhere, Ohio and need, say, a single-mode patch cord today, then there's probably a Graybar less than an hour away that has one in stock. Otherwise, they'll have one for me tomorrow before 7:00AM.

The instant I read the first sentence of your comment, I thought "McMaster-Carr but for food" might be the most appealing pitch for online grocery delivery I've ever heard.

...with the caveat that McMaster's facilities are staffed by people, not robots.

Amusingly, the Kroger near me is almost that way already.

Log into website, fill the cart, pick a time window, and push the button to order it. Someone starts working on it nearly instantly. The order is picked and waiting in a few minutes.

It's fast as fuck. Except...

---

If someone at Kroger ever reads this, then:

That time window aspect is the part of the system falls down hard for me.

Before I order, I have to pick a window in the future when I want to pick it up/get it delivered.

"I'm ready when you are; ASAP" isn't an option. Nor is "I'm already in the parking lot, you bunch of dweebs -- just bring my stuff out. Please?"

So if it's 6:05 when I order and the next window starts at 8:00, and they're fast as fuck (as they are) and have it done in less than 15 minutes, then: I'm waiting around for more than an hour and a half for nothing.

Because until the apparently-completely-arbitrary window is reached: It won't let me check in to pick up. It won't schedule a driver. My groceries are just sitting there (ideally stored at the right temperature but I can't know this) at the store while some wallclock mechanism that was designed by an asshole runs out.

This makes the whole thing feel clunky, stupid, and insulting.

It results a system that I use only when I absolutely do not want to be inside of a grocery store, like when I'm sick as hell in January and every body part hurts. Any other time, it's way faster for me to go in the store and shop it myself.

It should be convenient. It is instead almost always a burden instead of a benefit.

If picking up a pizza from Domino's worked like this, then they'd have gone completely out of business decades ago.

Our Kroger has the same service, we use it a lot. Grocery stores are annoying to me, and Kroger feels almost intentionally designed to piss me off, so that's why we use the pickup order thing. Beware:

1. Prices on the app are frequently higher than prices in the store. 2. Not all options available in the store are available in the app. 3. Don't assume they'll always have it ready on time. Or, at least, don't plan your day around it.

They force you to pick a window because stores have limited staffing, and only so many orders can be fulfilled at once. "Hire more people," you say? Hah!

We don't do delivery, so I can't comment on that aspect of the service.

I mean: Domino's also has a limited staff.

And most of the process is very similar between Domino's and Kroger.

Just pick out a selection of stuff on a website, and order it. They both provide timely status updates of that order. They both have varying staff levels and workloads. They both certainly have days when they're running very far behind, and days when they feel like they don't have much to keep busy with.

They both have pickup and delivery options; sometimes, with different per-item prices, deals, or fees for each option.

But that's where the similarities end.

If a person orders a pizza at 6:05 and it happens to be ready by 6:30, Domino's doesn't make that person wait until 8:00 to pick it up. They want it gone; the sooner, the better. A person can pick it up (in the store, or they'll bring it out to the car) as soon as it is ready. Domino's does not want any queues at all; neither inbound, nor outbound. And this makes sense: They're in the business of selling pizzas, not storing pizzas.

Kroger isn't like that. If a person orders groceries at 6:05 and the order is ready by 6:30, then: They hold the groceries hostage until 8:00. It's as if an otherwise-complete order just isn't ripe to be picked up by a customer until it has had time to purge itself in a waiting area -- regardless of workload. The queue is mandatory, and is governed not by the physical readiness of the order but instead by the clock on the wall.

This is inconceivably stupid and unnecessary. It serves no benefit to me, nor to the corporation, nor to the employees that work for that corporation. One might think that they'd be aware that they're in the business of selling groceries, but this mandatory purgatory shows otherwise.

(I'll betcha McMaster-Carr doesn't sit on stuff while a clock runs. That's a Kroger specialization. :) )

One difference is that the Domino's employee's job is to make your pizza. None of their other duties are exactly rocket science. I ran a pizza place, I'd know. Meanwhile, preparing your grocery order is maybe the third priority on any given Kroger employee's list, behind running a register, stocking shelves, inventory, cleaning, tending to Kroger's spastic self-checkout machines, ...

I guess I prefer my groceries to be ready at a predictable time, rather than sitting around waiting between 1 and N hours. No experience I've ever had with food delivery in the age of DoorDash has made me think "yeah, I want more of this experience in my life."

Oh, man.

My nephew works for Kroger, primarily picking stock for online orders.

He's a good dude and I enjoy hanging out with him, but I absolutely promise you that he doesn't do all of those jobs. He doesn't do anything quickly-enough to shift roles like that, and never has. To use a polite managerial description: He definitely works at his own pace.

I don't see that kind of task diversity at the store I usually shop at, either.

The register people do register stuff. The self-checkout people do self-checkout stuff. The order-pickers do order-picking. The people who bag groceries and fetch carts just bag groceries and fetch carts. The produce folks do produce. The florists florist. And so forth.

Sometimes I see a management-type range-walking from one problem to the next, but even that's exceptional.

It's the only real grocery store we have in the small city in which I live, so I get to spend a fair bit of time there whether I like it or not. I've spent years passively becoming familiar with the people who work there, and the jobs they do.

If they moved around much between different roles, I'd have noticed it by now.

(It's also a union shop, which may have something to do with it. When high-speed shifts from pushing a broom and heads out to the parking lot to fetch carts before he starts sorting produce, he's taking work away from the people who normally do those jobs and diminishing their roles. Unions may tend to dislike that kind of thing.

We didn't shift around much when I worked in union retail, either. It was a big deal for me to spend a day away from my department to help out with another one that was short-handed, and an opportunity was always presented for me to say "No, I'll just keep working where I normally work."

It was an even bigger deal if they needed help over on the grocery side of the store, which had a completely different union with a completely different contract. The union guys had to agree to allow it every time before that could happen.)

A store with a good deli/butcher is still like this to some degree

Toolstation still has a model like that, and I gotta say I love it. They also seem to hire people who actually know something about the products they sell which is an unfortunate rarity these days.

that is a guarantee for less sales, not sure it makes business sense. for example, i don't buy generic products, i want specific properties from them. and sometimes i don't know what i want, i look at the isle and only then decide. and let's not forget about impulse shopping.

honestly, i wouldn't shop at this store, i want to get the items myself, without any interaction. interactions add delays.

This reminds me of the retail chain Service Merchandise which apparently used to operate this way. You'd walk around the store looking at display products, pick things out on a sheet, and then they'd appear on a conveyor belt.

https://en.wikipedia.org/wiki/Service_Merchandise

I have never been to one because they went out of business decades ago.

This gave me a flashback to Service Merchandise. No idea how widespread they were, but that's how it operated. You'd collect tags for the things you want, take them to the counter, wait a bit and your order would roll out on a belt. Pull your car up, load it and leave.

Notable that the reasons for failure to meet benchmarks was that the locations were too far away, and that they are moving to the “Micro-Fulfillment Center” approach that Amazon is doing at Whole Foods. This is exactly what everyone predicted when Amazon bought WF - turn it into a grocery FC.

That makes sense to me.

Feels like we’re going to have warehouse scale vending machines in cities, and delivery bots taking them from the warehouse-vending-machine to the customer.

I like being able to see the thing I'm going to get and holding it in my hand.

I like not going to the store more.

Because tips are important to the income of delivery shoppers, I find that I generally get good produce selections. It might be difficult to transition that particular incentive to robots, but the point is that delivery items don't have to suck.

The only thing I really still pick out by hand every time are beef briskets. Pork shoulders tend to be uniform enough that randomly picking a cryovac works out, but there's a good bit of variation in brisket that makes a difference with the final product, at least when the brisket is prepared with a smoker. YMMV

Delivery shoppers wouldn't be able to pick out the good stuff if it's delivered by drone or whatever.

They could if there are human pickers.

In any event, delivery doesn't always mean the worst of the produce aisle, and while I noted that the incentive of tips might not transfer to robots, keeping repeat customers might be enough incentive for a way to be found to not make robots and grocery synonymous with only frozen food. That might mean human pickers; better automation on the food selection system; pre-inspected, washed and packaged fruits & veggies; etc.

>Because tips are important to the income of delivery shoppers, I find that I generally get good produce selections

Wait, you tip to get a good selection of produce to be delivered to you? This is very bizarre to me.

Yep. Instacart. I work from home and sometimes I don't want to go to the store (or it would be difficult because I'm on Zoom/Teams a lot), but I need vegetables, meat, milk, etc. for cooking.

With Instacart & Costco memberships and also ordering from the local discount grocers, I can get food delivered for less than it costs to actually go to the mainstream grocery stores like Von's, and I don't get bruised eggplants or cilantro that's already going bad. The drivers/shoppers are generally quite good at picking out items that can lead to higher tips (that or they're just in it for the love of good produce, but either way you can often tell they're not randomly loading the bags).

I'm not normally a fan of tips, but this seems like a reasonable use of one to me. The picker isn't paid on the shininess of the apple they bring you -- they're paid to pick as quickly as they can from what's on offer. The potential for a tip incentivises them to go beyond that requirement -- to pick the nicest/freshest rather than the most convenient.

The grocery industry relentlessly optimizes for implicit choices over expressed preferences. Nobody is asking for misters, colored lighting, skeumorphic veggie bins, and wide open sightlines in the produce aisle. Stores do it because customers buy more when they do. The same thing will happen to in-store shopping if consumer preferences swing ever swing that way instead.

I'll believe it when i see it

This isn’t what Amazon has done at least here on the Peninsula. My WF orders come from Brisbane just like my overnight shipping and Amazon Fresh orders do. Before that they were coming from San Jose, possibly from a WF there but there are closer WF stores in both directions and none in Brisbane.

I’m regularly surprised by how important physically picking out groceries is for a large segment of the population.

We have done grocery pickup for years but the pickup lanes are almost always empty while dozens of shoppers walk into the store.

To me, shopping for groceries by hand is a waste of time but it clearly has some utility for a lot of people.

I wonder if that inertia is making traditional grocery shopping stickier than it should be and disincentivizing optimization.

I hope consumer tastes will change because there’s no reason for us to all walk into a giant warehouse every week.

I like to browse what is there and make decisions on what I'll be eating based on what I see.

Purchasing online feels more narrow and has me thinking more about things I've cooked before vs what I might want to try cooking/eating.

Yes, it's not only pickup.

Online retailers UIs are all extremely bad for browsing. One would imagine they would be better, because they can reorganize any way they want, without any limitation, personalize it to each customer, and have several different organizations at the same time available for people to pick what's best each time.

But no, browsing universally sucks.

My grocery store's website (Jewel-Osco) doesn't even work on Firefox; searching for anything just gives me a loading screen that never goes away, even on a brand new profile with all cookies accepted and no adblocker or other extensions. On Chrome it works, but it's comically slow, and the mobile app is somehow even worse.

The really confusing part is the parent company's website (Albertsons) works just fine, though it is also slow.

Kudos for all the "smart" managers that throw direct sales away so they can spy on the more price-sensitive people that endure a bad experience in exchange for discounts or not owning a car.

It happens on so many kinds of store, it's baffling.

Food is what we're made of it and the buying, cooking, eating of it provides a lot of the structure of our lives. I'm skeptical of a view that would have us be even further alienated from these activities.

Shopping for food is important to me because food is important to me, and I have no desire to change this despite how "inefficient" it may be. This attitude has already very nearly optimized out most of the texture of daily life to no benefit that is apparent to me.

I do most the cooking in my house, and the majority of it is meat and produce. I can say from years of experience that it's easy to grab a bad apple if you aren't paying attention or know about food quality, and from the grocery pickers I've seen, they aren't and don't.

A guitarist doesn't just buy some random guitar from amazon - they see it in person and play it. If you cook and care about your food, using a food service just isn't something you'll want to do.

This. Actually, I would buy a cheap guitar (but not from Amazon), say $400-500, for a purpose like having one to place when visiting relatives at Christmas. But I wouldn't buy a nice guitar without inspecting and playing it.

I worked at a food store as a student a long time ago. Remarkably few customers are weekly. We did sell entire cartloads of food on certain days at certain times but it's pretty rare. Most of the people walking in will have to skip a meal that day if they did not stop at the store for just one thing. Then add some impulse purchases. Most people walk out with one grocery bag, some walk out with only one item. Where I lived, most of this behavior was poor planning not financial. Most of the items were pretty nice, not the cheapest. People who can't plan ahead to have enough eggs or whatever will never plan ahead enough for the enormous latency of very slow delivery. Those eggs they're buying, will be cooking mere minutes after purchase not hours.

I can pick my groceries faster and with less aggravation than I can navigate the online ordering UI's dark patterns and attempts to get me to "engage".

I noticed recently that my local trader joes is laid out like a physical dark pattern to get me to spend more money and buy shit I don’t need

I'd imagine most people aren't 100% positive on what they want to get beforehand. Sometimes you only realize you want something after passing by it. Maybe it's something you haven't gotten in awhile and hadn't considered beforehand.

And even if you are completely sure on what you want in advance, having someone else do it is not always great. At least with Instacart, the person doing the shopping frequently didn't know where something was and just assumed it was 'out' and tried to substitute it (badly). There was all this awful delay and back-and-forth and crappy picures with the person shopping to try to get the right thing.

Doing it yourself doesn't have that problem. You know what you want, why you want it, and what you're willing to bend on. No, X brand cheese is not a substitute for Y branch I wanted, never do that. But yes, Z brand and type of milk is fine compared to what I wanted and I know they are frequently out.

Grocery store employees aren't any better at this, btw. Especially since the stores like to re-arrange on a monthly basis.

They go in to see, hear, and smell good things. They experience some products first-hand in a way that shows whether they're as advertised or not. They also know what's out of stock with many, immediate substitution options. There's also more coupon, markdown, or haggling opportunities for those who want them.

Finally, walking into stores lets you connect to people. Those who repent and follow Jesus Christ are told to share His Gospel with strangers so they can be forgiven and have eternal life. We're also to be good to them in general, listening and helping, from the short person reaching for items too high to the cashier that needs a friendly word.

We, along with non-believers, also get opportunities out of this when God makes us bump into the right people at the right time. They may become spouses, friends, or business partners. It's often called networking. However, Christians are to keep in mind God's sovereign control of every detail. Many are one-time or temporary events or observations just meant to make our lives more interesting.

Most of the above isn't available in online ordering which filters almost all of the human experience down to a narrow, efficient process a cheap AI could likely do. That process usually has no impact on eternity for anyone. Further, it has less impact on other people. Then, I have less of the experiences God designed us to have. Which includes the bad ones that build our character, like patience and forgiveness.

So, while I prefer online shopping, I try to pray God motivate me to shop in stores at times and do His will in there. Many interestings things, including impacts on people, continue to happen. Some events hit the person so hard that, even as a non-believer, they know God was behind it. I'm grateful for these stores that provide these opportunities to us.

Or their online groceries didnt succeed because people can p4ice shop. I am of the belief Kroger does well because they obfuscate their prices and their tags which make it seems like they are sales truely are not.

Unlike Publix if I see a discount I know it is a discount. Every other item in Kroger has a yellow tag and a red price to make you think you are getting a deal when in fact the red number is higher than regular price at normal stores.

> Or their online groceries didnt succeed because people can p4ice shop.

Ocado does just fine though, and are rarely the cheapest choice.

It’s a great convenience though, we’ve been using it over a year now and it solved most of the bulk purchases, we then visit the store for other detailed items and get done quickly.

One of the reasons I kind of gave up on deliveries after COVID was the the experience of having a friendly but slightly rushed bloke clearly politely itching to get on to the next stop turn up at some random time in the evening (it's booked to a slot but the variance was large). Then he holds your door open and either helps you unload it watches you unload a bunch of randomly packed loose items from a large handful of his plastic crates, some with a single item in them, as fast as possible into laundry baskets in the hallway so you can transfer it to the right place at leisure. That was actually somehow really annoying to me.

Tesco used to use plastic box liners which you doing just hoick out, but those were quickly stopped due to bring plastic.

I'd rather they just handed over the crates or something and I could return them for a deposit the next time. Obviously I'd also rather all the supermarkets could share the same crates so I don't have to babysit piles of each brand separately.

Maybe Ocado have a better system then Tesco here?

Ocado (at least in the UK) pack items into plastic bags inside the crates, which makes unloading easier at the doorstep.

You are charged for the bags (in the UK you have to charge 5p for plastic bags) but are refunded when you return them (during a later delivery).

What are "normal stores"? For me, Ralphs (Kroger), Stater Bros and Whole Foods are the main available (what I think of as) "normal" grocery stores, and of the three anything on sale at Ralphs is sure to be the cheapest of the three.

Here in the Houston areas, supermarkets like Kroger/Walmart/HEB/etc always have single floor buildings. Why can't they build multi-floor buildings for storage upstairs and retail walk-in sales on the ground floor? On the above ground floors, they can create an automated or semi-automated system for employees to gather up items for online/delivery orders.

I would guess that having everything on one floor optimizes the unloading, restocking and logistics. Also construction is cheaper.

Good construction is not cheap and takes many quarters. Land outside the urban area is far too cheap and probably subsidized (directly or with free oversized infrastructure) because local government always wants jobs, even small numbers of shitty jobs.

Probably because you then need pillars throughout the entire building to support the second floor which you are loading down with a ton of weight. The average forklift weighs 3x or more the weight of the average car, and then adding racking and stock on top of that. Yeah if you completely redesign your storage system to not require forklifts you save weight there, but you end up adding the weight back with all the heavy duty track systems and extra heavy duty racks that are required to eliminate the forklifts. Plus there is liability of having that weight up top, a rack failure on a second floor could take down half the building.

It is possible, but you end up spending 10x as much on the building.

Then put the warehouse on the first floor and put the store on top.

Lots of big cities have grocery stores with parking garages under them, doesn’t seem much different.

Inner city high rise construction is entirely different from tip-up and bolt together single-story box stores in the suburbs.

The difference is the 100x the cost to build it and the completely different amounts of foot traffic and margins available in dense city centers. Nobody is going to build such a store if their return on investment is expected 50-100 years down the road.

I think this is correct. A lot of these buildings seem to be post frame or poll barn style. Relatively cheap for building large square footage buildings but add some limitations to multiple floors. Even if you put the storage floor under the shopping floor you'll run into tons of issues with buildings of these sizes that don't have a ton of pillars for additional support. I mostly see these stores built on vacant "rural" land on the outskirts of cities rather than in city centers themselves. Which means the single floor square footage is rarely an issue and not something worth designing a building around. If you have all the space you need to go wide, it's almost never worth going tall.

The vast majority of the inventory is already on the sales floor.

Also, the backstock is minimal. Stores are designed for turnaround.

Right. Not selling things fast enough is a bigger problem than not having enough storage for unsold stock.

Glad someone made this point. I'm curious how long people think most items in a grocery store last? Just consider the trucks you see stocking them on a daily basis. Typically it is bread and other high flow consumables, no?

Everything.

Retail stores are logistics. And part of that is product flow. There are trucks coming in every single day. When you buy an item at a store, that item is deducted from the store's inventory, when that item's stock reaches a certain threshold, an order is immediately placed to the distribution center, and that item is loaded onto a truck and could arrive as soon as that night.

There's no reason to keep anything "in the back" except for high demand items that aren't brought in by a vendor and overflow from items that didn't quite fill a shelf.

Right, I just meant that you have a high chance of seeing the bread and drinks/chips getting delivered. They turn over pretty much daily. I would imagine it is the condiments and other very long shelf stable things that you may not see getting restocked on a daily basis?

Oh, that's not really related to turnover.

Bread/snack cakes (Little Debbie, the bakery also does bread), chips, soda, and liquor/beer are typically handled by vendors. Coca-Cola has a guy come out and stock the Coca-Cola products. Frito-Lay has a guy handle the Frito-Lay products. Etc. They don't work for the store in any capacity.

Vendors typically come during the normal operating hours of the store. Bread guys like to be early in the morning. Chip and soda guys have routes and they'll get to you depending on how the rest of their route goes.

As for other stock, for the grocery side, the distribution center usually palletize stock based on aisle. And the pallets come shrinkwrapped on a truck that arrives at the store between 8 and 10. Someone from the store unloads the pallets from the truck into the warehouse. Once the truck is unloaded, they head back to the distribution center. At the store, the pallets are then staged near their respective aisles and workers restock the shelves overnight.

On the general goods side, the stock is loose in the truck, and a team of people unload the truck and palletize it based on department. Then those pallets are staged in the department for stocking by the overnight crew.

Source: my first job was with WalMart. I worked day stock in a few departments on both the grocery and general goods sides. I worked unloading the trucks on the general goods side. I also worked overnight on the general goods side. I've been involved with a good portion of the store side of the restocking. So all of this information is at least 20 years old, some things may have changed. But I've seen the vendors still while I'm shopping, so the broad strokes likelys till apply.

To rephrase what I think you are saying, I'm more likely to notice these trucks because they will be specifically branded by the vendors? That makes sense.

I assumed it was that and that they are there basically every day. Always notable on the days when a snow storm is announced and bread will be completely wiped out. Only to be fully stocked the next day.

Pretty much. They do stick out a bit since they don't match the stores' branding.

I would have worded this slightly differently.

The store is the warehouse and the store owner is allowing self service inside the warehouse but not at checkout.

Having robots means you're automating something that your customers would have done for free. The automation is an additional expense and does not reduce your operating costs.

The online grocery business model only works for two types of customers: those who are willing to pay a premium for convenience and those who need some specialty products that local grocers don't sell.

The first market is a competitor to doordash, this either means automating the in-store pickup or the delivery itself.

The second market is actually a drag on your local grocery stores. You don't want to carry niche products that are only interesting to a tiny portion of your market e.g. products for rare food intolerances, groceries for expats. If you want to carry them in your store, you'd want the customer to preorder them themselves, so you know exactly how much you need and then make them pick them up.

Basically the correct business model is in-house doordash (or B2B doordash) combined with preorders.

> Having robots means you're automating something that your customers would have done for free. The automation is an additional expense and does not reduce your operating costs.

Ultimately, I was pointing out why a two story grocery store with a "warehouse" on top doesn't make sense. A place to put stuff is not the issue for retail.

But, what you wrote there is a fair way to look at the core issue for Kroger.

I thought about this a lot with parking spaces, nobody like big, open, tree-less parking lots. Why not just build them up adjacent to the grocery store.

The answer is $. It costs too much and land is cheaper than building up (In most places).

All recent HEBs have dedicated grocery pickup staging space. I chatted with a staffer once. It is like its own little grocery store where they keep selections of hot, cold and room temperature bags of selected groceries temperature controlled until the orderer comes and they put them together and bring them out.

The ones in Bellaire and Meyerland are two level with parking (aka flooding space) below the store and a smaller parking lot on the second level with the store. Bellaire also has a fancy fuel cell setup for some reason. The single level HEB in Montrose(ish) was built into the site of an old complex of charming but nearly abandoned standalone quad/duplexes with many mature oaks. They seem to have retained nearly all of the trees on the grounds in greenspaces within the parking lot and entryway.

Here's some street view of Montrose. They also had a bike air and repair system when it opened. I'm not certain if it stayed in good repair itself. https://maps.app.goo.gl/KxHAvDqKca4E8L8a7

It's interesting that the problem had more to do with poor decision-making related to warehouse location than robotics limitations.

The title is a red herring.

Isn’t that the same thing? Robots without good decision making and working business model are nothing

I sometime use Ocado in the UK, and it's 'OK' but it's certainly not at the cheap end of the market. I more often use a traditional supermarkets home delivery service where it's manually picked; those supermarkets have the advantage of having very little infrastructure overhead in the picking - they mostly use their existing stores and pick at quiet times/over night. Ocado has to run entire warehouses just for this task. Ocado can only work with packed goods - not weighed vegetables for example - which the hand pickers in store can do, albeit whether they do it well is down to luck and the mood of the picker.

> Ocado can only work with packed goods - not weighed vegetables for example

Not quite. Packed yes, but for many vegetables they have both item count and weight-based packages, e.g. "4 potatoes" vs "1kg potatoes".

I think that strikes the right balance.

Interesting, however in my case we have someone who eats a banana each day with breakfast. There's no way to buy 7 bananas in your weekly shop!

>Sargent also said Kroger would refocus its e-commerce efforts on its fleet of more than 2,700 grocery supermarkets because it believed that its stores gave it a way to “reach new customer segments and expand rapid delivery capabilities without significant capital investments.”

Someone didn't read the 26 year old Webvan case study at CEO-school.

https://www.hbs.edu/faculty/Pages/item.aspx?num=26728

Whenn I lived in Atlanta the Krogers each had a nickname. There was disco Kroger because of its disco ball. There was murder Kroger that purportedly had been the site of a murder.

This I guess is Robo Kroger.

In Charlottesville all the Krogers are quite different.

A weird, dark, maze-like warehouse-feeling Kroger that just closed.

We have a really nice Kroger a bit outside town. I always think of it as the Gucci Kroger.

A college-kid, cheaper Kroger close to the center of town. The cheaper version of the Harris Teeter nearby.

There's as much variation in individual Krogers as between other grocery chains!

A common practice in Denver. Kroger's local brand is "King Soopers". There's Scary Soopers, Queen Soopers, and ironically El Safeway and Soviet Safeway.

I like to imagine that whenn is like iff -- ie, when would mean "when and only when", lol

> There was disco Kroger because of its disco ball.

... As in the supermarket had a disco ball? Was it spinning?

Those robots consume quite a bit of energy, I think racks hanging on linkages constraining their orientation (so they don't tilt) and constrain their translational motion to cycloids, so that a hanging rack can be let loose, swing across the lowest point and be caught at approximately the starting height but on the other side.

From wikipedia,

"The cycloid, with the cusps pointing upward, is the curve of fastest descent under uniform gravity (the brachistochrone curve). It is also the form of a curve for which the period of an object in simple harmonic motion (rolling up and down repetitively) along the curve does not depend on the object's starting position (the tautochrone curve)."

So swinging a rack along the cycloid is the fastest motion without having to contribute energy (apart from that to overcome friction etc.).

So you can have a large number of racks in the "left" position, choose to open a passage between racks 34 and 35 by having all racks >=35 swing to the right position. In this way all N racks can be accessed with only the loss of space of a single planar passage.

If everything which enters is weighed before insertion, the loading and unloading could happen near reversibly by arming or releasing appropriate counterweights.

Kinetic energy can also be stored gravitationally: accelerate (by dropping the weight) and decelerate (by lifting it again) for quick motions.

Better design for the ultimate cost center, energy consumption.

https://en.wikipedia.org/wiki/Cycloid

I remember a glowing video about this thing (by Tom Scott maybe?) and being confused how it could ever compete with humans being paid slave wages.

Guess I was right.

You were not, this works just fine in the UK

I mean, it's a fiercely competitive market and they've managed to stake out a position, which is great and all, but to be blunt they have a market share of ~2.1%, and they've consistently unprofitable. And they've been at this for like 20 years.

Honestly the main problem seems to be most people just don't like buying certain items online, and that doesn't seem to be changing quickly. If Covid didn't break people out of that, I can't think of anything that will.

And FWIW, I think for an online only supermarket you'd expect their website to be pretty amazing, but their competitors are just as good.

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.

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)

3 CFCs (robotics centers) closed, 5 continuing operating [1]. Initial commitment was 20 & Kroger is paying 350m$ to compensate the partner.

I don't know what success looks like but it's probably fair to say they were over-extended by roughly 30-40%.

https://chainstoreage.com/kroger-pay-350-million-automation-...

Around me, the online grocery shopping and pickup is still pretty popular post-covid. There's always a worker or two going around the store picking up for the online orders, so there's room here for some type of site-local automation (not remote robotic fulfillment centers, i could of told you that would be way too costly comparatively).

However, robotics that can navigate an existing retail grocery store is not here. yet.

> Kroger said on Tuesday that its decision to close the three robotic facilities, along with other adjustments to its e-commerce operations, would provide a $400 million boost as it looks to improve e-commerce profitability.

Amazing that both opening and subsequently closing the facilities could provide a boost to profitability.

> Speaking during an earnings call, interim Kroger CEO Ron Sargent — who took over in March after McMullen’s sudden departure following an ethics probe — said the company would conduct a “full site-by-site analysis” of the Ocado network.

Sounds like there were some politics involved in the original decision.

all it takes is one junior executive gets caught by one chinese robot saleswoman, and the next thing you know…

Good news for blue collar workers, tough for investors. The bean-counting dream of LLM's and Robotics remains, but until ChatGPT is placing your order at Mcdonalds drive-thrus and Amazon is laying off warehouse associates en masse, i'd say that last 5% is still taking 95% of the time.

McDonald’s is an interesting example because they’re increasingly replacing cashiers with kiosks. Robotics/LLMs seem to have diminishing returns compared to that in the order taking realm.

Sure, but not the kitchen staff, which is where the robotics dream is supposed to take you.

I watched a show over 20 years ago that showed a fully automated robotic kitchen at McDonalds. I can only assumed they have continued to evolved it and perfect it as the technology has improved. I think it’s simply a question of when it hits the tipping point on cost.

There may also be an issue with logistics when it comes to making sure the machines keep running if there is a problem. They can barely keep the ice cream machines running.

I imagine kitchen robots are harder than they might sound. Kitchens are rough environments for machines. They are hot, greasy, and steamy. And everything that comes in contact with food needs to be able to be taken apart, washed, and sanitized at least daily.

True, that’s a good example of the commenter’s “last 5% is the 95%”

I hate those stupid things so much. They're really, as far as I can tell, just moving all labor to the kitchen and drive-thru, while considering the dining area an afterthought.

Maybe they're just following the trends their own numbers tell them are happening, but I don't think they trust robotics enough to put an area they truly care about under its purview just yet.

Even 30 years ago more than half the sales at a McDonalds were in the drive through. Some new McDonalds don’t have much of an inside dining room at all anymore, while having multiple drive through lanes.

McDonald’s is also pushing their app pretty hard with lots of incentives.

I don't know what they are thinking, the kiosks are not cheap to install or maintain, they are buggy, and they've put me off from going into McDs anymore. The In-N-Out nearby is cheaper, friendlier with plenty of employees working, (and better quality), so not sure what McD's end game is here.

I don’t like them either. The UX is annoying and it’s way too large. The benefit is that I get to see more options than can fit on the screens and they have photos, but still in person just seems better.

But I’ve read they’re effective, apparently, in consistently upselling compared to a human, so I’m guessing that’s their play.

I love it when people invent things to force everyone perform self service and call it 'progress'.

I usually see people preferring to use the self service in McDonalds or supermarkets when given the option of either, so the consumer must find some benefit to it.

I always choose self service because that's where the volume is. I can wait in one of any Costco lines with 4 carts and 1 person checking them through, or I can wait in the line with 4 carts and 6 self service checkouts.

Despite the math working out insanely well for self service checkout, sometimes the gamble still doesn't pay off and the single employee burns through 4 carts faster than 6 self service checkout kiosks.

Costco does pretty good here though, drug stores go slow as hell.

I have a mental list of who the fast/slow checkout people are at my store, would be curious to see numbers but I think the fast people are more than 2x as fast as the slower ones.

I really appreciate the ability at Costco to scan with my phone as we pick up items. Check out becomes a breeze. But I absolutely hate self-checkout grocery stores unless I just have a few items. The idea that I'll run a cart full of groceries through self-checkout is insane. Not only do they routinely not have accurate bar codes requiring some sort of lookup from an attendant. I'll have things which require human clerks to "approve" anyway like wine. In addition, my self-checkout lines don't have the full conveyors like the human checkout lines. So everything has to be moved from cart directly to bag and there isn't enough bag space so you have to start putting bags into the cart which still has groceries. The whole thing is a mess and I hate it.

I like it, I order on my phone before I get to the place and just pick it up.

Any reason to like the old way is just nostalgia in my head.

There are pros, but ultimately we’re all still apes, we need human interaction and contact. It can’t be completely replaced with technology.

Is ordering a burger really human interaction and contact?

Do you really need a human to ask whether you want fries with that?

> we need human interaction and contact

Indeed, but not at McDonalds.

Yeah the introduction of the kiosks is what tipped the scale and stopped me going to McDonalds. And I used to eat there a couple of times a week at least.

Taco Bell by us has AI order taking and it is amazing. Quick, always has been getting it correct, and easy to understand. Granted, it's probably very abusable, but for someone just wanting to put in a quick order it is way better than a person.

I've had very bad luck with Taco Bell's AI. It is not good at all with modifications in my experience. I actually order on the app now just to minimize my interaction with the chatbot. It is very good at processing "mobile order for <my name>" at least.

It looks like they got the robots together but forgot the groceries.

TIL Ocado is supposed to be an automation/robotics co.

I associate it more with delivery vans that seem to be in no particular hurry (unlike uber eats / DPD / UPS etc)

it's just a wheeled bot that's driven by a joystick by some offshore person /s

They see themselves as a tech company, but fundamentally they've only really cracked their own grocery business, I think.

> Ocado has delivery vans that seem to be in no particular hurry (unlike uber eats etc)

True. the difference is that Uber eats takes an order and immediately aims to deliver it as soon as possible.

Ocado takes a grocery order, stores it and aims to deliver it e.g. "next Wednesday, between 6pm and 7pm", and you can modify the order until midnight on Tuesday.

Given that UK Urban traffic levels are unpredictable, the vans will occasionally be in position before the start time. There also is some time where the guy is in the back of the van finding the current order.

But you're right, as the public interacts with them, Ocado's role is "Deliver groceries in a van" not "automation/robotics". The latter is an implementation detail to us.

Also, several people's groceries in 1 van is more fuel efficient and less traffic congestion than all of those people each driving to a big store and back. So it's a win.

Weird headline, totally unsupported by the article.

According to the article, there were several strategic blunders, including trying the model outside of cities where lack of density cut against it. Plus the apparent dismissal any value their 2700 retail locations could provide.

As far as I can tell, Kroger didn’t acknowledge anything except a change in strategy.

Doesn't that support the article? their bet was massive robotics in centralized warehouses, but that turns out not to be profitable.

Unsure how the headlines doesn't align. Maybe it's different than what I'm seeing:

> Kroger acknowledges that its bet on robotics went too far

Point me to where in the article Kroger, as a corporate statement, “acknowledged” that it “went too far”? I just re-read and it’s not there.

A proper headline would be something like “facing disappointing results, Kroger shifts robotics strategy”. It’s a subtle but important difference. Main thing being that good writing does not put words in its subjects’ mouths. Unless Kroger actually acknowledged it, you don’t say they did.

this kind of stuff is still probably a few orders of magnitude too expensive per unit cost.

I'm also skeptical it'll ever work in America due to the general lack of density.

Also worth mentioning Kroger just lost a multi million dollar lawsuit in Florida after one of their delivery trucks hit a cyclist. I wonder if this has anything to do with it as well.

"Something, something, ... omelettes ... few eggs" -- mouthpiece from corporation that lobbies to cut regulations

I can't find the story, but if it's a human-driven truck there's nothing special about a vehicle hitting someone. Everyone that drives a vehicle is accepting that risk. It's not heartless to have vehicles. And I don't even know what particular regulations you're trying to imply.

Implying that Kroger announced that it would shut down its Florida operations shortly after losing the lawsuit with the cyclist. Nothing more.

Here is the story

https://www.facebook.com/100064532630592/posts/pfbid0DYoPXet...

I wasn't saying you implied anything. I was saying rolandog seemed to go beyond general cynicism about corporations to an unreasonable complaint.

Looking at the details, I could say Kroger shouldn't have hired her but I'd rather say that if she was dangerous enough to not hire as a driver then her license shouldn't have been reinstated in the first place. (Though that's if "couldn’t recall if her driver’s license was suspended just months before he hired her" means it actually was suspended, and Bike Law isn't doing some trickery with wording.)

Either way good they paid out.

For the shutdown, I do think it's a coincidence. They're shutting down facilities in multiple states and that lawsuit isn't even a tenth of a percent of the relevant costs.

Thanks for correcting me, I would've sworn this was about a truck with autopilot. So, if I'm understanding it correctly: although the driver was at fault, there were systematic failures in training personnel that would've prevented an unqualified driver from driving the truck?

Yeah, that seems about right. It's a failure but it's not tied closely to regulation and it's not something that should affect their overall plans.

All delivery services so far, have been partial emulations of a concierge service including the high cost, but have made the user suffer thru the friction instead of the human concierge.

I don't see a way around this using mere technology. Either the service quality will have to be low, or the cost will have to be prohibitively high, or the people providing the service will have to be very poor.

We have solutions going back centuries that work. If you need more than an occasional concierge service you hire a chef as an employee. At some point it makes more sense to hire a part time chef than to pay enormous extra fees for giant shopping robots. Perhaps the economic decline from AI will make the idea of having house servants more acceptable to the very few people still having an income. Most strategies to replace high labor cost people with technology miss the point of long term permanent economic decline. We don't have a problem of too many financially successful people LOL if anything the problem is a severe lack of them.

Its kind of like cars. You have to unperson poor people who know how to drive if you want success with computer driven cars. This is the same concept but for hiring a servant to cook.

Also its very hard to scale royalty. If only the local equivalent of royalty can afford to pay to make the effort required to shop and cook and drive disappear, its going to be hard to dotcom scale that to billions of customers if there's only a couple multimillionaires who don't care about the price.

Trying to automate food shopping is like trying to go back to full service gas stations. Nobody wants it so its an uphill battle to sell.

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