Kroger has gained new ground in its battle to gain market share in the face of its retail rivals. The company announced a new, exclusive partnership with online supermarket Ocado, which will be debuting its technology in the U.S. for this first time as part of the deal.
"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," said 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 Smart Platform, which includes online ordering, automated fulfillment, and home delivery capabilities, is expected to enhance Kroger's digital and robotic capabilities and help expand its coverage area. As part of the partnership agreement, Kroger will increase its existing investment in Ocado by five percent in a subscription rights agreement. According to a press release, this will bring the company's total investment to more than six percent.
"Ocado's unique, proprietary, and industry-leading technology is set to transform the shopping experience of consumers around the world," said Tim Steiner, CEO of Ocado Group. "Our success as a retailer shows that we can offer customers unrivaled 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."
At the time of the announcement, Kroger and Ocado have already been working to identify three new sites across the U.S. to develop automated warehouse facilities, and expects to identify up to a total of 20 sites 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," said Alex Tosolini, Kroger’s Senior Vice President of Business Development. "Through Restock Kroger, we will continue expanding partnerships to create customer value."
Will this partnership give Kroger the extra edge it needs to take on the likes of Amazon, Walmart, and beyond? The massive deal is certainly a big step in a profitable direction, and Deli Market News will keep our eyes on the horizon for new updates.