U.S grocer Kroger signs deal to use Ocado's home delivery tech
LONDON (Reuters) - British online supermarket Ocado <OCDO.L> said U.S. retailer Kroger Co <KR.N> had agreed an exclusive deal to use its technology for grocery deliveries in the world's biggest market.
The agreement take Ocado's home-delivery platform into the United States, and marks the fourth major deal it has signed with supermarkets in six months, as the sector races to meet the challenge of online competition from the likes of Amazon.
Ocado said it believed Kroger, which had sales of $122 billion in its last fiscal year, was the grocer best-positioned to succeed in the U.S. sector.
It will now discontinue discussions with other US-based retailers.
Ocado's technology automates the processing and packing of online grocery orders, using hundreds of robots in technological advanced order fulfillment centers.
The two companies are working to identify the first three sites in 2018 for the development of new, automated warehouse facilities, and will identify up to a total of 20 over the first three years of the agreement, Ocado said.
As part of the deal, Kroger will take a stake in the British company, equivalent to 5 percent of the existing share capital valued at 183 million pounds, Ocado said.
Ocado said it expected the earnings impact of the deal to be neutral in full-year 2018.
(Reporting by Paul Sandle; editing by Costas Pitas and Kate Holton)
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