Ocado signs technology deal with US grocer Kroger

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

Ocado to enter US market with 'transformative' Kroger deal

It also said that Kroger, which recorded sales of US$122bn during 2017, making it the largest grocery retail chain in the United States in terms of revenue, was best placed to retain that market-leading position.

He said Kroger, which had sales of $122 billion in its last fiscal year, was the grocer best-positioned to succeed in the USA sector.

Shares in Ocado, the online grocery delivery platform, soared +44% to fresh record highs on news of another licensing agreement, this time with Kroger, which would allow the U.S. supermarket giant to use Ocado software to strengthen its own grocery-delivery network.

Under the terms of the deal, Kroger has discontinued discussions with other retail tech firms, will pay Ocado a monthly consultancy fee and is to acquire a five per cent stake in Ocado.

That figure could rise to 20 during the first three years of the partnership, it added.

'After years of starving investors of the worldwide deal they so desperately craved, Ocado has been rattling off transformational tie-ups at an astonishing rate in the last few months, ' said Connor Campbell, financial analyst at Spreadex.

Tim Steiner, CEO of Ocado Group added: "Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world".

'The objective of this partnership is to allow Kroger to redefine the grocery customer experience in the USA through the adoption of the centralised, automated model of online retailing provided by the Ocado Smart Platform, ' Ocado said in a statement.

Rodney McMullen, chairman and CEO of Kroger, said the retailer is on a mission to develop new customer experiences by investing in technology. "Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience - creating value for customers and shareholders alike".

"We are actively creating a seamless digital experience for our customers".

'We can only applaud Ocado's success in engaging with the most attractive counterpart in the biggest potential market for online food'.

Even though Ocado remains the #13 most shorted stock, according to FCA disclosure rules, this is an improvement over its position in July 2016, when it was the most shorted stock with 21.37% of shares out on loan and 16% in November 2017, before the first deal came through and the company began proving the sceptics wrong.

Ocado has signed a string of similar technology deals with major supermarkets in France, Canada and Sweden.

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