United States deal strengthens Ocado's case to be seen as a tech provider

Kroger who has the second biggest grocer in the US after Walmart also agreed to buy a 5% stake in the UK online supermarket

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

Ocado, which already works with Sweden's ICA, Canada's Sobeys and France's Casino (as well as Morrisons in its home market), said it had agreed a contract that could see Kroger open up to 20 automated warehouses in the USA over the next three years.

"We think this is just about as positive a deal as could have been expected to have been announced by Ocado", analysts at Barclays said.

Kroger, which is second only to Walmart in terms of United States market share, with revenues past year of $122bn (£90bn), will also take a 5pc stake in the FTSE 250 firm at a value of £183m.

The exclusive deal with Kroger - Ocado says it will not work with any other United States retailers - follows similar deals with Groupe Casino, Sobeys and ICA Group. They will pinpoint up to a total of 20 over the first three years of the agreement, with Kroger paying Ocado compensation if it does not commit to the target capacity.

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 United States through the adoption of the centralised, automated model of online retailing provided by the Ocado Smart Platform, ' Ocado said in a statement.

Tim Steiner, Ocado's CEO, used the announcement to underline his belief "Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world".

The agreement, Kroger's response to Amazon's purchase of Whole Foods, takes Ocado's home-delivery platform into the United States for the first time and marks the fourth major deal it has signed with supermarkets in six months.

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

Latest News