Ocado strikes U.S. deal to roll out online shopping tech

Kroger who has the second biggest grocer in the US after Walmart also agreed to buy a 5% stake in the UK online supermarket

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

Ocado Group PLC, which runs online delivery services and makes related software, said Thursday it's signed a partnership agreement with supermarket chain The Kroger Co.

As part of a newly inked alliance, Kroger (KR) is harvesting the ordering, fulfillment and home delivery capabilities of United Kingdom -based online grocer Ocado, ramping up its arsenal against grocery rivals Walmart (WMT) and Amazon (AMZN). Within the terms of the agreement, Kroger will also acquire a 5 percent stake in Ocado. According to a press release, this will bring the company's total investment to more than six percent.

The partnership not only brings Ocado's technology to the USA 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.

"We are actively creating a seamless digital experience for our customers", Rodney McMullen, Chairman and CEO of Kroger, said in a statement.

Kroger is one of the world's largest grocers, with sales reaching $122bn in 2017. Retailers are experimenting with different ways of delivering online grocery orders, seeking to balance speed with cost as e-commerce takes off for food.

Ocado chief executive Tim Steiner said the deal would be "transformative" for the business.

For Ocado's part of the deal, the company will be tasked with working with Kroger to put together as many as 20 robotic warehouses across the US.

Edinburgh Worldwide is the top-performing global smaller companies investment trust over the last three years, with the shares up 86%, while the Global Discovery fund has returned 55% over three years to the end of April, placing it third in its Citywire sector. Ocado is a British online supermarket.

Ocado has already partnered with Groupe Casino, Sobeys Inc. and ICA Group. "Kroger has been impressive in its efforts to explore innovation and stand up to threats from Amazon and Walmart in grocery".

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.

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