Is Kroger's Self-Driving Grocery Delivery a Game Changer?

The Kroger Co . KR is aggressively working toward more convenient grocery delivery options. In this regard, the company has started using Nuro's fully autonomous, driverless R1 vehicles for grocery delivery services in Scottsdale, AZ. Prior to this, the company and Nuro had jointly tested self-driving cars in Arizona, wherein it achieved 1,000 deliveries.

To avail this service, customers will have to shop from or Fry's Food Store mobile app. The company is charging a fee of $5.95 for this option of home delivery with no minimum order facility. The order can be scheduled for the same day or next day delivery. However, this service will be limited within nearly one mile of Arizona supermarket owned by Kroger.

Per media reports, once the order is placed, customers will receive a message confirming the same. On the day of delivery, they will also receive a code that has to be punched in to open the door of the vehicle and redeem the groceries.

This move is seen as part of the company's strategy to better compete with Walmart WMT and Amazon AMZN . Per media reports, Walmart in collaboration with Ford F and Postmates intends to deliver grocery using self-driven vehicles in Miami. Also, Walmart and Waymo came together in July for a similar initiative. Amazon has also aced this game as apparent from the company's plans to use drones for delivery purpose.

Industry experts believe that the competition in the U.S. grocery market is going to intensify further in the digital space, and supermarket chains will have to constantly revisit their strategies to endure the same. This means either you "shape up or ship out", and Kroger has taken stock of the situation.

Earlier, the company inked a deal with British online grocery delivery company, Ocado that reinforces its position in the online ordering, automated fulfillment and home delivery spaces. Certainly, Kroger is leaving no stone unturned to attract consumers and attain incremental revenues. Kroger is well poised to boost market share by expanding store base, and introducing new items, digital coupons, and order online, pick up in store initiative.

We note that this Zacks Rank #3 (Hold) stock has gained 2.5% in a year's time, against the industry 's decline of 5.2%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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