Ocado said today that US supermarket business Kroger will order up to 20 customer fulfilment centres (CFCs) from it in the first three years of their technology partnership.
The first three CFCs are set to be ordered by the end of this year, and expected to go live within about two years of the order. Ocado expects to spend around £90m on commissioning and fitting out the automated centres with enough equipment to handle agreed volumes.
Today’s update gives more detail – and insight into the scale – of a deal first announced last May. The partnership is highly significant for Ocado, which is using technology and expertise it first developed for its own online grocery services to offer ecommerce technology and fulfilment solutions to third-party retailers. The retailer already offers such services to European grocers from UK supermarket Morrisons to Groupe Casino in France, as well as to a numbers of non-grocery retailers. But this first US partnership looks set to be its largest yet.
Luke Jensen, chief executive of Ocado Solutions, 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 customers and transform the food retail market in the US.”
Alex Tosolini, Kroger’s senior vice president of business development, said: “This is a significant step towards 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.”
Image courtesy of Ocado