Ocado and Kroger pen deal to build 20 warehouses

The online grocer and tech provider said Kroger would order the first three customer fulfilment centres by the end of this year. They are expected to be operational within two years.

Ocado will install and maintain the technology needed to operate the warehouses.

It said it will incur costs of around £90m to build the first three customer fulfilment centres, the locations of which will be revealed by Kroger “within the next several weeks”.

Ocado added that it had “more than sufficient funds” to cover the costs associated with the initial three warehouses, with “over £500m of financing headroom”.

The etailer said it expects the earnings impact of the ‘Master Services Agreement’ with Kroger, initial details of which it first revealed back in May, to be neutral in its current financial year.

Ocado Solutions boss Luke Jensen said: “We are delighted to have signed this services agreement with Kroger which sets out the key parameters for our working relationship going forward.

“The Kroger and Ocado teams have been working hard for some time to prepare for the opening of the first CFCs in the United States.

“We are very excited at the prospect of helping Kroger bring new services and value to its customers and transform the food retail market in the US.”

Kroger senior vice-president of business development Alex Tosolini added: “This is a significant step toward both solidifying our partnership with Ocado and redefining the Kroger customer experience.

“The alliance will bring to the US Ocado’s unparalleled innovation and technologies. This is exciting news and will help accelerate our vision to serve America through food inspiration and uplift.”