UK online grocer Ocado has signed an exclusive partnership with America's second-biggest supermarket chain.
Ocado’s technology will be used in the US exclusively by Kroger, which is one of the world’s biggest grocery chains with annual sales of $122bn (£90bn).
Under the terms of the deal, Kroger will also take a 5% stake in Ocado. Ocado said its “transformative” entry into the US market centred on sharing its technology with Kroger, which had annual sales of $122bn (£90.4bn) in 2017.
Its automated systems complete the processing and packing of online grocery orders, using hundreds of robots in its UK distribution centres.
Under the partnership, the pair are looking to open three similar sites in the US this year – with a further 17 in the pipeline.
While the financial terms of the deal are yet to be fully ironed out, Ocado said Kroger would take a 5% stake in its business – worth approximately £183m ahead of Thursday’s market opening. Ocado shares were trading almost 80% higher on Thursday afternoon – reaching £10 per share at one stage. The shares were first listed in 2010 at 167p.
The agreement is the latest in a series of deals that Ocado has struck with retailers to share its technology that automates online grocery orders.
In the past few months, Ocado has struck deals to share its technology with Groupe Casino in France, Sobeys in Canada and ICA Group in Sweden. It also operates the online business of the UK’s fourth largest supermarket, Morrisons.
