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Ocado Announces Partnership With Kroger In The US

17 May 2018

Ocado's shares soared by nearly a third to an all-time high after the online supermarket announced it will build as many as 20 robotic warehouses in the U.S. as part of a landmark deal with American supermarket giant Kroger that will significantly accelerate its plans to become a global supplier of white-label online shopping technology.

Ocado said those will offset in part the total fees expected to be agreed between the two parties.

It added: "In the longer term, Kroger will retain exclusivity in the USA conditional on it meeting market share targets or ordering an agreed number of CFCs per annum".

In the longer term, Kroger will retain exclusivity in the United States conditional on it meeting market share targets or ordering an agreed number of CFCs per annum.

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.

He added: "We are actively creating a seamless digital experience for our customers".

'The objective of this partnership is to allow Kroger to redefine the grocery customer experience in the U.S. through the adoption of the centralised, automated model of online retailing provided by the Ocado Smart Platform, ' Ocado said in a statement.

For Ocado, the investment case for the business has always been based on its insistence it could get worldwide grocers to sign up and pay for its technology.

"Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world".

Ocado has signed a partnership agreement with the United States retail giant Kroger, the world's third largest retailer, to build 20 automated warehouse facilities, strengthening the bull case that Ocado should be valued as a technology company rather than a retailer.

Ocado Announces Partnership With Kroger In The US