United States giant Kroger is Ocado's latest partner

United States giant Kroger is Ocado's latest partner

Online retail specialist Ocado has signed its fourth worldwide deal, with the announcement that it will be supplying its Ocado Smart Platform technology to Kroger in the US.

Ocado's chief executive, Tim Steiner, described the deal as "transformative" and said it would "reshape the food retailing industry in the United States in the years to come".

Kroger, the largest US supermarket chain by revenue, operates about 2,780 supermarkets in the USA and has some 443,000 employees.

Ocado Group PLC, which runs online delivery services and makes related software, said Thursday it's signed a partnership agreement with supermarket chain The Kroger Co. 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.

The threat of a big disruptor entering the sector has put pressure on food retailers to be on top of their game when it comes to online deliveries, and that's playing into the hands of Ocado, with a number of deals in the pipeline now coming to fruition.


As part of the deal, Kroger will take a stake in the British company, equivalent to 5 percent of the existing share capital valued at 183 million pounds, Ocado said.

Earlier this month, it inked a deal to build Swedish supermarket ICA's online grocery business and it also has finalised deals with Canadian grocery Sobey's and french supermarket company Groupe Casino.

Rodney McMullen, Kroger's chairman and CEO, described the deal with Ocado as "an innovative, exciting and transformative partnership". "Our partnership will speed up our efforts to redefine the food and grocery customer experience, creating value for customers and shareholders alike".

Tatton-Brown said the detailed financial terms still had to be agreed, but the deal was expected to be neutral in respect to earnings in the full-year 2018.

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