Ocado partners with USA retail giant Kroger

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Ocado is making a major push into the USA market after striking a deal to provide its technology in America to the grocery giant Kroger, the world's third largest retailer.

Tim Steiner, CEO of Ocado, said the deal means that his company can bring its transformative retail technology to consumers worldwide.

The partnership not only brings Ocado's technology to the US but also provides a broad e-commerce solution that is exclusive to Kroger here, according to Mike Schlotman, executive vice president and chief financial officer at Kroger. In contrast to its main competitors, the company has no chain of stores and instead does all of its home deliveries from its network of warehouses.

Rodney McMullen, Kroger's chief executive, said the partnership would the grocer "redefine the food and grocery customer experience - creating value for customers and shareholders alike".

Kroger will begin with three sites in 2018, and has a goal of up to 20 fulfillment centers for the first three years of this arrangement said Ocado.

Under the partnership, the pair are looking to open three similar sites in the United States this year - with a further 17 in the pipeline.

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"As we work through the terms of the service 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".

Ocado is on the cusp of promotion to the FTSE 100 after it reached a potentially game-changing partnership with one of the world's biggest grocers.

Ocado's market capitalisation rose to £5.54bn, leapfrogging retail stalwart Marks & Spencer.

Earlier this month, the company inked an agreement with Sweden's ICA, building on overseas deals with France's Group Casino and Sobeys of Canada.

Kroger Co (NYSE:KR) officially has a deal in place that's aimed at boosting its online grocery offerings. Retailers are experimenting with different ways of delivering online grocery orders, seeking to balance speed with cost as e-commerce takes off for food.

The Kroger deal is "seismic" for Ocado, which has been looking to break into the USA for some time, according to Bryan Roberts, Global Insights Director at tcc global.

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