May 20, 2018

Ocado partnering with Kroger

17 May 2018, 05:30 | Melvin Schneider

Ocado strikes 'transformational' deal with US giant Kroger

Party in the USA: Ocado shares rocket on US push in tie-up with Kroger

Kroger investing in a British online grocer as the U.S.'s largest supermarket chain seeks to compete with Inc.'s expanding food-retail operation and Walmart Inc.'s digital deals.

"This is a huge opportunity to redefine the grocery experience of Kroger's customers and create value for the stakeholders of both companies", says Tim Steiner, chief executive, Ocado.

In a statement issued today (17 May), Ocado said that having signed the partnership agreement with Kroger it will now "discontinue discussions with other US-based retailers".

Shares in Ocado (OCDO) rocket 43% higher to 787.9p following the announcement of a tasty partnership with United States grocer Kroger, giving the online grocer-to-e-commerce tech licensor a foothold in the vast groceries market across the pond.

Earlier this month, it inked a deal to build Swedish supermarket ICA's online grocery business and it also has finalised deals with Canadian grocery Sobey's and french supermarket company Groupe Casino.

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"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". Kroger will also take a 5 per cent stake in Ocado.

Rodney McMullen, chairman and CEO of Kroger, said the retailer is on a mission to develop new customer experiences by investing in technology. "Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience - creating value for customers and shareholders alike".

The new relationship is not expected to affect Kroger's earnings per diluted share guidance range for 2018 and 2019 as it is already reflected in the company's "Restock Kroger" plan.

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