Ahold Launches Automated Supermarkets

Grocery group Ahold Delhaize is set to launch automated warehouses to speed up completion of orders and slash delivery times.

Reuters reported that the world’s eighth biggest food retailer is partnering with startup Takeoff, which will enable it to automate order collection at mini “robot supermarkets” attached to U.S. chains like Stop & Shop.

Takeoff develops small warehouses that save space by stacking groceries to the ceiling, and use robot arms to put together shoppers’ orders. The warehouses can be used as small supermarkets that can supply several stores, and cost about $3 million to build – less than the cost of a typical store revamp, according to Takeoff.

“Ahold is preparing for a major push,” said Curt Avallone, Takeoff’s chief development officer. “If it goes well, both from their side and our side, the hope is we would rapidly be able to build quite a few.”

Ahold Chief Executive Frans Muller also confirmed the deal, explaining that it will help expand the company’s digital business for less cash.

“With the robotized solution, we can optimize those picking costs and be closer with micro fulfillment to our catchment areas. We also reduce the cost of the last mile,” he said.

Ahold’s shares soared 5 percent on Wednesday as it reported third-quarter results that beat analysts’ forecasts. Opening the automated warehouses is another way for the grocer to compete with Whole Foods, which was bought by Amazon last year. Soon after, Whole Foods launched same-day grocery delivery with Amazon’s Prime Now in more than 60 cities. Ahold Delhaize acquired Chicago-based online grocer Peapod in 2000, and while it’s still a market leader, growth has slowed due to heightened competition.

Delhaize, the current owner of Food Lion (among other grocery chains), and Ahold, current owner of Stop & Shop, completed their $29 billion merger in 2016. Delhaize is based in Belgium and Ahold is based in the Netherlands.