Ocado to develop 20 new US warehouses in first three years of deal with Kroger
The terms of Ocado’s landmark deal with US supermarket chain Kroger were unveiled this morning, with the British online grocer set to operate 20 warehouses across the pond in its first three years of the agreement.
Ocado's shares were up more than five per cent in early morning trading.
Kroger is set to order 20 warehouses, or what Ocado calls Customer Fulfilment Centres (CFCs) over the first three years of the deal, and order the initial three CFCs by the end of 2018.
The locations of the first three sites were not disclosed but details will be made public by Kroger in several weeks.
Today's 'Master Services Agreement' between Ocado and the US is the latest development in a major deal struck between the two firms back in May.
The partnership is one of several recent major coups for Ocado, which has ramped up efforts to strike deals with retailers by sharing its technology that automates online grocery orders.
The British grocer has enjoyed a steady market rise in the last year, entering the FTSE 100 for the first time in June, with the firm also now building what it hopes will be the largest online grocery-distribution centre just outside London.
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 its customers and transform the food retail market in the US."