Kroger, Ocado form exclusive partnership to increase online shopping capabilities
This agreement will provide Kroger customers with online ordering, automated fulfillment and home delivery capabilities.
The Kroger Co., Cincinnati, and online supermarket Ocado, based in UK, announced an exclusive partnership agreement in the United States that will accelerate Kroger's creation of a seamless shopping experience for U.S. consumers.
The alliance will bring the Ocado Smart Platform to the United States for the first time, providing Kroger customers with online ordering, automated fulfillment and home delivery capabilities.
As part of the partnership agreement, Kroger will increase its existing investment in Ocado by 5% in a subscription rights agreement, bringing the company's total investment to more than 6%. Ocado will partner exclusively with Kroger in the United States, enhancing Kroger's digital and robotics capabilities and helping expand its seamless coverage area.
"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," says Rodney McMullen, Kroger's chairman and CEO. "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."
"Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world," says Tim Steiner, chief executive officer of Ocado Group. "Our success as a retailer shows that we can offer customers unrivalled choice, quality and convenience, efficiently and profitably. 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 for development of new, automated warehouse facilities in the United States, and will identify up to 20 over the first three years of the agreement.
"We look forward to innovating together with Ocado to provide our customers the best possible online and in-store experience," says Alex Tosolini, senior vice president of business development. "Through Restock Kroger, we will continue expanding partnerships to create customer value."