Kroger partners with Ocado ‘to serve customers anything, anytime, anywhere in U.S.’

The Kroger Co. has struck a deal with online supermarket Ocado “to provide every family in America with the convenience of shopping for anything, anytime and anywhere.”

Cincinnati-based Kroger and United Kingdom-based Ocado announced an exclusive partnership today that Kroger said will accelerate Kroger's creation of a seamless shopping experience for America's families. Kroger said the alliance will bring to the U.S. for the first time :the unparalleled technology underpinnings" of the Ocado Smart Platform, which includes online ordering, automated fulfillment and home-delivery capabilities.  

As part of the partnership agreement, Kroger will increase its existing investment in Ocado by 5 percent in a subscription rights agreement, which will bring the company's total investment to more than 6 percent. Ocado will partner exclusively with Kroger in the U.S., enhancing Kroger's digital and robotics capabilities.

In an article on Forbes.com, Neil Stern, a partner at McMillanDoolittle, said the "battle for grocery e-commerce supremacy just got a whole lot more interesting.”

"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," said Rodney McMullen, Kroger's chairman and CEO, in a press release. "We are actively creating a seamless digital experience for our customers. Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience — creating value for customers and shareholders alike."

Tim Steiner, CEO of Ocado Group, said Ocado's proprietary technology is set to transform the shopping experience of consumers around the world.

“Our success as a retailer shows that we can offer customers unrivalled choice, quality and convenience, efficiently and profitably,” he added. “The opportunity to partner with Kroger to transform the way in which U.S. customers buy grocery represents a huge opportunity to redefine the grocery experience of Kroger's customers and create value for the stakeholders of both Kroger and Ocado. As we work through the terms of the services agreement with Kroger in the coming months, we will be preparing the business for a transformative relationship which will reshape the food retailing industry in the U.S. in the years to come."

Kroger and Ocado are already working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the U.S., and will identify up to a total of 20 over the first three years of the agreement.
Ocado Solutions is responsible for corporate partnering, which began with its agreement to operate the online business of Wm Morrison Supermarkets plc in the UK, and more recently with agreements with Groupe Casino, Sobeys and ICA Group to develop their online businesses in France, Canada and Sweden respectively.

OSP is an enabling platform provided as a service to retailers. It comprises access to Ocado's physical infrastructure solutions to run highly efficient warehouse operations for the single pick of products, together with the entire end-to-end proprietary software applications required to operate an online grocery business — from user interfaces, through warehouse operating and control systems, to logistics, route planning and optimization.