Kroger lands 15-year tax exemption for its Ohio data centers
Grocery chain will only have to pay 25 percent of sales tax generated from its Ohio facilities
Kroger has been approved for a 15-year data center tax exemption by the Ohio Tax Credit Authority, according to a the company announced Monday.
The exemption, which will apply to 75 percent of data center sales tax, is meant for “all technology equipment purchased for Kroger's two data centers and a supporting technology facility, which are located in in Blue Ash and Hamilton, Ohio.
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To qualify for the 75 percent, 15-year exemption, the regional grocery store chain has made a commitment to invest at least $100 million in capital investments at its Ohio sites over three years. Additionally, Kroger will have to pay $1.5 million in annual compensation.
An employee pushes grocery carts outside a Kroger Co. grocery store in Louisville, Kentucky, U.S., on Wednesday, June 14, 2017. (Luke Sharrett/Bloomberg via Getty Images)
"Kroger continues to invest in technology and digital capabilities to advance our seamless ecosystem for our customers that combines the best of the physical store experience with the digital experience," Yael Cosset, Kroger's chief technology and digital officer, in a statement.
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He added that the tax exemption would help Kroger make “meaningful technology and digital investments that will benefit local customers and those who shop at our stores across the country.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KR | THE KROGER CO. | 59.22 | +0.64 | +1.09% |
Kroger and Ocado's new customer fulfillment center – an automated warehouse facility with digital and robotic capabilities, also known as a “shed”. (PRNewsfoto/The Kroger Co.)
Kroger has increased its technological and digital footprint in recent years. The company is building automated distribution centers throughout the country with the help of Ocado Solutions, a warehouse tech company that uses robotics to fulfill online grocery orders. Additionally, Kroger is using data and personalization to streamline relevant products and enhance customer experience for online shoppers.
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"Online grocery is expected to grow by 40 percent in 2020, and Kroger is primed to benefit from that growth by investing in its digital future," said Kimm Lauterbach, the president and CEO of REDI Cincinnati, a first point of contact for companies considering the Cincinnati region as a place to locate and grow, which has partnered with Kroger and helped the chain with its Ohio tax exemption initiative.
Throughout the coronavirus pandemic, Kroger has been able to “accelerate its digital offerings” with no-contact delivery, low-contact pickup and ship-to-home options. The grocery chain has also expanded its contact-free payment solutions with Scan, Bag, Go and Kroger Pay.
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Twenty-four percent of grocery shoppers have reportedly used Kroger’s digital services, according to a June market survey from Winsight Grocery Business – a grocery and supermarket news outlet.