【590】Robots to ‘Fight’ in US Grocery War
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AS IT IS
Robots to ‘Fight’ in US Grocery War
November 12, 2018
The Ahold Delhaize logo is seen at the company's headquarters in Zaandam, Netherlands August 23, 2018. (REUTERS/Eva Plevier)
A Dutch company that sells food is creating “robot supermarkets” in the United States, Reuters has learned. The move will permit it to compete in the fast-growing business of online grocery ordering. The idea is to speed order picking, reduce delivery time, and save money.
The name of the company is Ahold Delhaize. It is based in the Netherlands and owns Peapod, Stop & Shop, Giant Food, Food Lion and other grocery stores.
Company officials are set to speak about the robot supermarket plan at an event for investors on November 13. Officials are expected to discuss their partnership with Takeoff, a new company that builds small warehouses. The Takeoff warehouses will be filled to the top with groceries, and robots will gather shoppers’ orders for milk, bread, fruit and other items.
Each Takeoff warehouse can supply several stores with online orders. They cost about $3 million to build. Takeoff says that is less than the cost of redesigning a grocery store.
Ahold Chief Executive Frans Muller confirmed the deal on Wednesday. He said it should help online grocery sales grow at a lower cost than they would if the company used traditional warehouses.
Ahold’s stock rose 5 percent on Wednesday.
Online grocery war
Ahold’s plan is the latest move in a war for the online grocery market. The market war has grown since Amazon’s takeover of Whole Foods last year. Whole Foods has launched same-day grocery delivery with Amazon’s Prime Now in more than 60 cities.
Other stores are hurrying to compete: Walmart will test Alert Innovation’s Alphabot automated grocery picking at a store in New Hampshire. Kroger has joined with British online grocery expert Ocado.
Until now, Ahold has used human workers in large warehouses to organize ordered items and put them into boxes for delivery.
At one Albert Heijn warehouse outside the Dutch city of Eindhoven, pickers each move one item every 10 seconds and walk about 4.5 kilometers a day.
Pawel Kamienczuk is a 28-year-old order worker from Poland. He runs while he tries to move 380 items an hour.
“At the beginning, it took time to get used to it, but now I don’t feel tired,” he said.
Kamienczuk wears a device on his wrist that tells him where to go and which item to take next. The device aims to find the shortest way between groceries and to reduce blocks with other carts.
He scans each item with another device and puts it into one of 18 boxes nearby.
Efficiency is important when labor costs are rising in the United States and Europe.
At Ahold’s Peapod grocery store warehouse in the U.S. state of New Jersey, workers make more money if they beat speed targets. They are also closely watched to keep quality high.
“We have many people that check after us,” said a worker named Amal.
Peapod has offered only next-day delivery so far. The partnership with Takeoff will permit the group to offer same-day delivery, or the ability for shoppers to order their groceries online and pick them up in the store. The first warehouse will be built near a Shop & Stop in the northeastern state of Connecticut.
The U.S. online grocery market is still young. Currently, it makes up just 1.6 percent of grocery sales. However, the market is expected to more than double by 2023, according to industry research group IGD.
I’m Susan Shand.
Reuters reported this story. Susan Shand adapted this story for Learning English. Kelly Jean Kelly was the editor.
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Words in This Story
grocery – n. food and supplies bought at a store
delivery – n. the act of taking something to a person
ecommerce – n. activities that relate to the buying and selling of goods and services over the Internet
scan – v. to use a special machine to read or copy information into a computer
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