Kroger Forms Partnership With Online Grocer Ocado

Kroger and online supermarket operator Ocado have formed an exclusive partnership agreement in the U.S. that will accelerate Kroger’s e-commerce shopping platform.

The alliance will bring to the U.S. for the first time the technology of the Ocado smart platform, which includes online ordering, automated fulfillment and home delivery capabilities.

Kroger will increase its existing investment in Ocado by 5% in a subscription rights agreement. This will bring the company’s total investment to more than 6%. Ocado will partner exclusively with Kroger in the U.S., enhancing Kroger’s digital and robotics capabilities and helping expand its seamless coverage area for in-store and online shopping.

“We see Ocado as an innovative, exciting and transformative partnership in pursuit of our Restock Kroger vision, to serve America through food inspiration and uplift,” said Rodney McMullen, Kroger’s chairman and CEO. “We are actively creating a seamless digital experience for our customers. Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience— creating value for customers and shareholders alike.”

Ocado is a U.K.-based online grocery retailer, operating its own grocery and general merchandise retail businesses under Ocado.com and other specialist shop banners, together with its solutions division. Ocado Solutions is responsible for corporate partnering. OSP is an enabling platform provided as a service to retailers. It comprises access to Ocado’s physical infrastructure solutions to run efficient warehouse operations for the single pick of products, together with the end-to-end proprietary software applications required to operate an online grocery business from user interfaces, through warehouse operating and control systems, to logistics, route planning and optimization.

Tim Steiner, CEO of Ocado Group, said, “Our success as a retailer shows that we can offer customers unrivaled choice, quality and convenience, efficiently and profitably. The opportunity to partner with Kroger to transform the way in which U.S. customers buy groceries represents a huge opportunity to redefine the grocery experience of Kroger’s customers.”

Kroger and Ocado are working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the U.S., and will identify up to a total of 20 over the first three years of the agreement.