Kroger brings delivery business in-house

US supermarket giant Kroger has announced it is beginning to take its delivery operations in-house.

As a first step it announced that it is taking on more than 200 new staff for Kroger Delivery in South Florida. It is both looking for drivers as well as new staff experienced in the logistics side of delivery.

“We are thrilled about the opportunity to provide fresh food and convenient services to customers throughout South Florida,” Andrea Colby, eCommerce corporate affairs and communications manager at Kroger, said in a statement. “The service combines the efficiency of technology with the experience of our associates to deliver fresh, affordable groceries directly to customers’ homes.”

Until now, Kroger has relied on grocery and convenience delivery company Instacart to handle this side of its business. While Instacart can do the job effectively, in bringing it in-house, Kroger will reduce costs per delivery and take more of the profit per transaction.

For Instacart, one of the fast-delivery businesses that has sought profitability through vast growth, a major client like Kroger pulling out could spell trouble. In the UK, Tesco has recently indicated a similar move away from using third party delivery businesses, all of which are losing money and none of which have yet to make a profit.

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