USA giant Kroger is Ocado's latest partner

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

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

Kroger is one of the world's biggest grocery retailers, and a market leader in the U.S., with sales in fiscal 2017 of $122bn.

The plan is to roll out three customer fulfilment centres (giant automated warehouses) this year and a total of 20 over three years.

Rodney McMullen, chairman and chief executive of Kroger, said the partnership would allow it to "speed up our efforts to redefine the food and grocery customer experience".

Ocado CEO Tim Steiner is confident that this deal, and others like it, will "transform the shopping experience of consumers around the world". It will take a 5% stake in Ocado as part of the deal.

UK-based online grocery specialist Ocado has added to its recent list of high-profile partnerships with the news that it has signed a major collaboration agreement with United States group Kroger, the world's third-largest food retailer, to build new ecommerce infrastructure.

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

Laith Khalaf, senior analyst at Hargreaves Lansdown, said that as one of the most shorted stocks in the United Kingdom - where investors bet that a firm's share price will fall - Ocado's deal with Kroger was a "poke in the eye" for the hedge funds who have bet against it.

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. Ocado also works in partnership with Morrisons in the UK.

The online grocery market in the USA is less developed than in markets in western Europe but analysts believe, slowly but surely, more Americans will look to add shopping online to the way they buy food in the years ahead - and the country's largest bricks-and-mortar chains are weighing up how to play in the channel.

"This is a sign that the momentum is very much behind Ocado in terms of its global expansion".

Losses incurred today alone by the "shorties" are in excess of £150mln.

All in Numis got it spot on: this is a big deal...for everyone involved.

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