Kroger Ship sinks quietly—an overloaded ecommerce side bet that never fit the grocery giant’s DNA.
After a quiet shutdown in March 2025, Kroger has officially killed its third-party ecommerce marketplace—signaling a strategic retreat to its grocery roots.
Kroger kills Ship: another failed DTC side quest
Another one bites the dust.
Kroger just quietly nuked its third-party ecommerce marketplace, Kroger Ship, and unless you’re watching LinkedIn like a hawk, you probably missed it.
No flashy press release. No investor spin. Just a 404 and a vague note buried in an FAQ page.
This was Kroger’s “Amazon-me-too” play, launched in 2018, expanded in 2020 with help from Mirakl (the software powering Best Buy and Macy’s marketplaces), and dead by March 2025. RIP.
Let’s break down why this one failed—and what it tells us about grocery ecommerce in 2025.
The catch: Ship never made sense for grocery margins
If you run ecommerce for a grocery chain, here’s what you already know: margins suck, perishables are tricky, and logistics are brutal.
So when Kroger decided to bolt on 50,000+ third-party SKUs—from toys to bedding to baby furniture—it was a weird flex. It added complexity, confused shoppers, and (clearly) didn’t drive the revenue they hoped.
Even with post-2020 ecommerce tailwinds, ship-to-home has collapsed. Once 42% of online grocery orders, it’s now just 18%, according to Brick Meets Click.
People want speed, not surprise boxes from UPS. Two-hour pickup is the norm. Third-party junk shipping in 3–5 business days? That’s 2019 energy.
Why it matters: Not all retailers can be Amazon
Let’s say the quiet part loud: Kroger is not Amazon. Or Walmart.
They don’t have the scale, the assortment, or the infrastructure to profitably run a general-merch marketplace. And honestly, they probably shouldn’t try.
Even Celia Van Wickel (ex-Walmart, now at Russell Stover) called it: regional grocers like Kroger don’t have the volume or traffic to make third-party marketplaces work. Especially not when fulfillment depends on FedEx and seasonal demand.
It’s not that marketplaces don’t work—they just don’t work for everyone.
You need:
- Massive scale
- Operational muscle
- High-margin categories
- A shopper base that trusts you to sell more than salad
Kroger didn’t check those boxes. So they pulled the plug.
Operator POV: Good riddance, focus matters
For ecommerce operators, this is the move you should make when a side hustle becomes a sunk cost.
Ship was:
- Confusing to customers
- Low-margin
- Operationally messy
- Strategically distracting
The closure also coincides with a leadership shake-up: CEO Rodney McMullen resigned in March after a conduct investigation, and new digital chief Yael Cosset just took over a consolidated ecommerce unit. It’s a house-cleaning year.
And this is the smart pivot: double down on what you’re good at—in Kroger’s case, that’s grocery pickup, delivery, and owned brand ecommerce. Not third-party toy sales.
The bottom line
Kroger tried to go wide. It didn’t work. So now they’re going deep.
Ship’s death isn’t a failure—it’s a correction. A reminder that not every retailer needs a third-party marketplace to win online.
When in doubt? Do fewer things better.
The Weekly Rundown for Ecommerce Insiders
Kroger does have the volume they just dont have the brains