Kroger Forms Partnership With Online Grocer Ocado

Kroger paying $247M to license Ocado online home-delivery technology

The company announced a new, exclusive partnership with online supermarket Ocado, which will be debuting its technology in the USA for this first time as part of the deal.

United Kingdom -based Ocado is listed on the London Stock Exchange and comprises one of the world's largest dedicated online grocery retailers.

Kroger shares were last up 1.6 percent on the deal, with investors reassured by the USA company saying the move would not dampen expected earnings for 2018 and 2019.

"We are actively creating a seamless digital experience for our customers", Kroger CEO Rodney McMullen said in a statement.

The deal to become Kroger's exclusive partner in the USA secures Ocadao's entry into the world's biggest market.

"Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world", he commented. This is being done though a subscription rights agreement and brings its total investment in OCDGF to 6%.

Ocado chief executive Tim Steiner said working with Kroger to transform the way in which USA customers bought groceries represented "a huge opportunity to redefine the grocery experience" for Kroger customers.

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"The scale of the deal could shake up the current USA grocery e-Commerce market, offering a step-change in service levels, order accuracy and timeliness", said Roberts in an email sent to Retail TouchPoints.

The two companies are working to identify the first three sites in 2018.

"Ocado has really awesome technology that works", said Ken Lonyai, Independent Consultant and Strategist, in a RetailWire discussion.

Since 2014, Ocado has been exploring selling its technology and logistics expertise in a service model with an external retailer, and in recent months it has landed partnerships with Sobeys and Casino, Sheehan noted. Kroger will also take a 5 per cent stake in Ocado.

Kroger operates almost 2,800 stores in 35 U.S. states and has a turnover of more than $115 billion (£85 bn).

Ocado's technology automates the processing and packing of online grocery orders, using hundreds of robots in technologically advanced order fulfillment centers.

Ocado was also upbeat on the deal and its own abilities. Shares in Ocado were at 552 pence before the deal was announced.

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