Kroger and Ocado Agree Upon Service and Operational Terms
CINCINATTI, OH - Kroger has gone one step further in its fight to keep up with e-commerce mega-companies like Amazon and Walmart—this time hand in hand with U.K.-based online grocer Ocado. According to a report from Reuters, Kroger plans to put in orders for the first three of 20 previously announced distribution centers before 2018 is through.
The distribution centers would be built to be what Ocado refers to as Customer Fulfilment Centres (CFCs) and would effectively give a strong boost to Kroger’s delivery business. The CFCs are robotically operated, and under the terms of the deal both retailers agreed to in May, Kroger will order 20 of them in these first three years of the agreement with Ocado.
As of yesterday’s report, Ocado has not yet revealed the locations for the first three CFCs, but did say Kroger will reveal additional details in the next several weeks. Reuters noted that Kroger expects each CFC to go live within approximately two years of each order.
Ocado’s deal with Kroger is the U.K. retailer’s largest to date, the source noted, and exceeds partnerships with Morrisons in Britain, Casino in France, Sobeys in Canada, and ICA Group in Sweden. Following the report, Ocado shares rose as high as 6 percent, making for a 195 percent gain over last year.