Kroger partners with Ocado

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

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

US-based retailer Kroger will be using Ocado's Smart Platform technology to power its online food and grocery deliveries.

The deal boosts Kroger's stake in Ocado, whose shares popped more than 50 percent in premarket trading, by 5 percent to 6 percent.

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.

Kroger, who posted revenues of $122bn past year, will utilise Ocado's technology to automate and process the packing of grocery orders, using smart warehouses and robots in advanced fulfilment centres. It started distributing groceries for Waitrose and floated in 2010.

Here's how leading retail analysts saw Ocado's latest deal.

Shares in Ocado (OCDO) rocket 43% higher to 787.9p following the announcement of a tasty partnership with USA grocer Kroger, giving the online grocer-to-e-commerce tech licensor a foothold in the vast groceries market across the pond.

The deal should help Kroger compete with Amazon, which has entered the grocery delivery market in a big way.

Currently, the two companies are looking for suitable locations to establish three automated warehouse facilities.

It also said that Kroger, which recorded sales of US$122bn during 2017, making it the largest grocery retail chain in the United States in terms of revenue, was best placed to retain that market-leading position.

Rodney McMullen, chairman and CEO of Kroger, said the retailer is on a mission to develop new customer experiences by investing in technology.

He added: "We are actively creating a seamless digital experience for our customers. Our partnership will speed up our efforts to redefine the food and grocery customer experience, creating value for customers and shareholders alike". Ocado expects the earnings impact from the Kroger deal to be neutral in fiscal year 2018.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.