King Soopers parent Kroger partners with world's largest online grocery supermarket

FSMNews

FSMNews

Kroger and online supermarket operator Ocado have formed an exclusive partnership agreement in the US that will accelerate Kroger's e-commerce shopping platform.

Kroger Co. has signed an agreement with UK-based Ocado Group Plc to bring that grocer's platform of home delivery into the US, the two companies jointly announced on Thursday.

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.

Ocado will partner exclusively with Kroger in the US, "enhancing Kroger's digital and robotics capabilities and helping expand its seamless coverage area to provide every family in America", according to a release.

Ocado has broken off talks with other United States supermarket chains following the deal with Kroger, which operates nearly 2,800 stores across the U.S. under various brands. "Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience - creating value for customers and shareholders alike".

"It is not just online selling to customers, they have capabilities that will also help us provide piece pick items to our stores so that will help our logistics", Scklotman explained.

The scale of the pair's ambitions was summarised by Ocado boss Tim Steiner, who said it could transform the food retail industry in the US.

FSMNews

"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".

The new agreement is also one of a series of partnerships that Ocado has made with retailers around the world in order to share its innovative technology.

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.

"This model - a pure-play retailer using its platform as service support - was very successful for Amazon a decade ago, and this could potentially be a similar game changer for Kroger", she explained.

In 2016, it was reported that Ocado was close to a deal with Kroger's rival Publix.

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

Jensen added that the recent Amazon tie-up with Whole Foods proved that the USA grocery market is changing and that people want to both order online and shop in-store.

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