Ocado boss Tim Steiner believes its partnership with Kroger will transform the American grocer into “the number one player in ecommerce in the US”.
Steiner said Ocado’s technology and logistics expertise, coupled with Kroger’s “strong customer business, strong ethics and big ambition”, will help it usurp the likes of Amazon and Walmart online.
The businesses plan to build 20 robotic warehouses across the US in the next three years and have already revealed the locations of the first three sites – Monroe in Ohio, Florida and Mid-Atlantic.
Speaking at the World Retail Congress (WRC) exactly a year since striking the landmark deal that propelled Ocado into the FTSE100, Steiner said: “The US’ largest supermarket was clearly the number one choice for us in the US, as well as the ambition of [Kroger CEO Rodney McMullen] and his team to win in ecommerce in the US.
“Their ambition is very clear. It was clearly stated to us and I think it’s fairly clearly stated to the outside world, and so we think that putting the strengths of Kroger together with the strengths of Ocado, and the innovation we will both bring and will be added to by other [Ocado] customers over the coming years, will mean that they should become the number one player in ecommerce in the US.”
Steiner added: “We are going to win together. We need to make sure we are deploying the best thing for the customer, with the best economics.
“If we can do that, and do that across not just the existing footprint, but the rest of the US, and leverage the strengths of both organisations and continue to drive innovation, it’s going to be a phenomenal deal for both companies.”
Kroger boss Rodney McMullen, who joined Steiner onstage at WRC in Amsterdam, described the partnership as being “like a marriage”, in that “neither party can get to where it needs to be without the other”.
McMullen said: “When you look at Ocado, one of the things that we’ve been tremendously impressed with is the progress they continue to make. If you look at Ocado five years ago and look at Ocado today, it’s a completely different organisation.
“Everything you see, they continue to push themselves to keep getting better and better. And what they do is incredibly important – using technology to be massively efficient, from picking the order to connecting with the customer.
“It’s all those things that we got so excited about and we just thought that, even if we could do it remotely as well as Ocado, it would take five or 10 years to get to where they are, not to where they are going.
“It made a lot more sense to partner with Tim and the team.”
Ocado’s deal with Kroger is the biggest partnership it has created over the past two years.
Ocado’s valuation has rocketed to almost £9bn as a result – more than double what it was worth before details of the Kroger deal were announced.