Kroger To Begin Testing Self-Driving Grocery Delivery Service In Arizona

Supermarket chain Kroger Co. has announced it will start testing its self-driving grocery delivery service at a store in Scottsdale, Arizona.

The grocery retailer will start delivering customer’s groceries in driverless Toyota Prius cars at a Fry’s Food Store location on Thursday. The first phase of the test will have room for drivers to operate the vehicles. Nuro’s R1 driverless delivery van will begin testing this fall, according to Reuters.

"We're excited to launch our autonomous vehicle delivery pilot with Fry's in Scottsdale," said Kroger Chief Digital Officer Yael Cosset in a press release. "Kroger wants to bring more customers the convenience of affordable grocery delivery, and our pilot with Nuro will help us test and learn to understand customer acceptance of autonomous vehicles in our seamless offering."

The self-driving service from the Fry’s store will cost $5.95 with no minimum order. It is only available to customers in a certain zip code, the company said.

The Cincinnati-based grocery chain on June 28 announced its partnership with driverless car startup Nuro for its autonomous vehicle fleet. Kroger said it hoped the deal would "change the status quo of grocery delivery through convenience at a low price."

Nuro was founded in 2016 by Google engineers and its cars are made and designed primarily for making deliveries. The California-based company equipped its Prius models with its driverless software and sensors for its test run with Kroger.

Kroger's self-driving rollout comes after competitor Amazon thrust itself into the grocery business when it acquired upscale grocery chain Whole Foods in June 2017 for $13.7 billion.

Besides optimizing its grocery delivery service, Kroger has also looked to expand its presence overseas. The company announced on Tuesday that it would start selling its products to Chinese customers via e-commerce site Alibaba. The online shop will offer Kroger’s organic SimpleTruth brand, which grossed $2 billion in annual sales this year since it launched in 2012.

Kroger, with nearly 2,800 stores across the U.S., is currently the country’s largest grocery chain. In 2017, the company made $123 billion in sales.

Shares of Kroger (KR) were up 0.68 percent Thursday morning.