Dive Brief:

• Kroger announced on Tuesday that it has launched a restaurant supply business offering next-day delivery to establishments in the greater Dallas area.
• Kroger Restaurant Supply offers “competitive wholesale pricing” by the case or unit to restaurants for delivery seven days a week.
• The new supply business comes as grocers increasingly court business clients for their e-commerce services.

Dive Insight:

Kroger has positioned its new business unit as a supplier for small and independent restaurant operators, offering set prices and frequent delivery options for establishments that may have a hard time meeting order minimums and planned supply schedules that many foodservice companies require.

Kroger also angled its new venture as an additional resource for restaurants facing supply-chain constraints.

"Supply chain bottlenecks are impacting nearly every restaurant across the country – this opportunity comes at a great time for small and independent restaurants," Corey Mobley, executive director of the North Texas region of the Texas Restaurant Association, said in a statement. 

Kroger said fulfillment services are available to catering companies and bakeries as well as restaurants. It’s offering free next-day delivery on orders that total $250 or more.

Having built out sophisticated e-commerce fulfillment networks during the pandemic, grocers are looking for ways to boost demand for those networks as shoppers migrate back to stores, said Jordan Berke, founder and CEO of consulting firm Tomorrow Retail Consulting, in a recent interview. Increasingly, retailers are looking to corporate clients to boost e-commerce demand because they place large, recurring orders, he said.

Kroger offers online fulfillment primarily through its stores. It’s also building out a network of automated fulfillment centers that will increasingly handle e-commerce delivery and pickup fulfillment — and that need large order volumes flowing through their systems in order to justify their hefty cost.

Kroger is currently building a 350,000-square-foot automated customer fulfillment center in the Dallas area that’s expected to become operational by the end of this year.

A Kroger spokesperson said the restaurant supply service, which is currently a pilot program, does not utilize the new fulfillment center and will instead rely on existing distribution centers at this time.