Kroger is moving forward with plans to build one of its first automated warehouses to fill online orders of fresh groceries in Dallas, Texas.
The U.S. retail giant also says it aims for the facility to help solve some of the food desert issues in southern Dallas and create jobs for area residents.
The building - which will span 55 acres upon completion - will take 24 months to construct, reports Dallas News.
"We are excited about transforming the grocery retail landscape in the North Texas region," Kroger said in a statement Tuesday, adding the retailer will have more details soon.
The facility will be in Councilman Tennell Atkins' district; he says he estimates the city will recoup much of its investment in the form of sales taxes within five years.
No areas can be red-lined, says local Council member
Yet the development has also garnered local concerns.
Council member Carolyn King Arnold says she is worried that Kroger's online grocery delivery service will red-line some neighborhoods.
In fact, this has been an issue in the past with other companies, the publication reports.
But both Robin Bentley, assistant director of economic development for Dallas, and Rita Williams, Kroger's representative at the council meeting, say they have discussed that issue. And they will be taking steps to make sure it doesn't happen.
It's a requirement of the city's agreement with Kroger, Bentley says: "No areas can be red-lined."
Another concern the council raised was about the technical capabilities of senior citizens. Specifically, they wondered whether the older generations would be able to place online orders from a mobile app or computer.
In response, Council member Jennifer Gates suggests that senior centers, libraries and other places can assist them.
Kroger has other fulfillment centers in the works
The retail giant says it has been working with leading U.K. online grocer Ocado since May 2018 to replicate Ocado's digital and robotics capabilities in the U.S.
Kroger comments that it wants to build 20 of these fulfillment centers, which cost about US$55m each.
So far, it has announced three others — in Monroe, Ohio; Groveland, Fla.; and one in a Mid-Atlantic state it hasn't announced.
Kroger started construction on the first one in Ohio in June. The 335,000-square-foot center will be ready in 2021, it notes.
The company says it will use robotic and digital technology to fill online orders. Additionally, it will still employ about 400 people.
Deliveries from Kroger and other grocery chains now are largely fulfilled from supermarkets near customers' homes.