The next stage of grocery e-commerce just ramped up a gear with the announcement of a strategic alliance between U.S giant Kroger and the UK’s Ocado.
Ocado’s technology automates the processing and packing of online grocery orders, using hundreds of robots in technological advanced order fulfillment centers. Ocado has recently been working on licensing their technology solutions and had created partnerships with Morrisons, Grupe Casino and Sobeys in Canada.
The Kroger deal takes this to a whole new level. As part of the deal, Kroger will take a stake in the British company, equivalent to 5% of the existing share capital valued at £183 million (about $247 million USD).
According to e-commerce expert Neil Stern: “I consider Ocado to be best in breed in terms of their automated fulfillment (Customer Fulfillment Centers) and creating customer-friendly interfaces to facilitate efficient ordering. This has led to what is arguably one of the few e-commerce grocery businesses that is actually profitable, with group turnover of £1.5 billion (about $2 billion USD) and significant EBITDA profit of £86 million (about $116 million USD) in 2017.”