CINCINNATI — Kroger Co. announced on Tuesday that it has partnered with Instacart Inc. to deliver online grocery orders to customers’ homes in as few as 30 minutes.
The move is intended to help the Cincinnati-based grocery chain grow its business without creating any new positions, a necessary step considering it currently has about 20,000 active job openings, CNBC reported.
Per the partnership, the deliveries will be fulfilled by “gig economy” workers for the San Francisco-based third-party delivery service, the network reported.
Kroger CEO Rodney McMullen told The Wall Street Journal that the supermarket chain tested 30-minute deliveries about two years ago, but staffing shortages rendered it unfeasible. Leveraging Instacart’s existing technology and staff addresses the logistics, he said.
With more than 2,700 stores under multiple banners, Kroger is the country’s largest supermarket operator and includes such household brands as Ralphs, Harris Teeter and Fry’s. The grocer closed fiscal year 2020 with 460,000 employees, but the COVID-19 pandemic has fueled a substantial nationwide labor shortage, making it more difficult to keep hiring on pace with growth, CNBC reported.
“We’re aggressively hiring anywhere we can,” McMullen told the network’s “Squawk Box.”
“One of the biggest constraints we have right now is finding talented people,” he added.
According to the Journal, high labor and transportation costs have made it difficult for retailers to reach “consistent profitability in delivery,” especially as the pandemic-era surge in shopping deliveries wanes.
Instacart CEO Fidji Simo told the newspaper that deliveries of convenience-store items, such as snacks and toiletries, are growing rapidly, with roughly 20% of the company’s customers paying more for faster delivery.
“The consumer’s need for speed is real and here to stay,” Simo said.
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