Swiftly reposted this
In 2018, Kroger made a bet that sounded brilliant on paper. Partner with Ocado, bring cutting-edge UK fulfillment tech to the US, and build automated warehouses that would dominate online grocery. Fast forward to today: They're shutting it down at a $2.6 billion cost and an operating loss of $1.5 billion this quarter. What went wrong isn't complicated—the demand projections were wildly optimistic and the operating costs were fixed and enormous. When volume doesn't materialize in that scenario, the math becomes impossible. So Kroger's pivoting hard toward marketplace models: Instacart, DoorDash, Uber Eats. This matters for anyone in grocery, especially regionals. If Kroger—with their 2,800 stores, scale advantages, and deep pockets—couldn't make the unit economics work on native ecommerce, what does that signal? The marketplace play isn't sexy. You're sharing margin and customer data. But you're also plugging into existing demand, proven logistics, and someone else's customer acquisition spend. For most grocers, that tradeoff is probably worth it. Curious what others are seeing. Are you still building native, or bet on the marketplaces?