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Dive Brief:
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Ocado plans to open two customer fulfillment centers — one in Charlotte, North Carolina, and one in Phoenix — with Kroger in fiscal 2026, Ocado Non-Executive Director Stephen Daintith told investors Thursday during an earnings call timed to the company’s fourth-quarter fiscal 2024 results.
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Kroger’s order in January for Ocado’s Auto Freezer solution, which automates the management of frozen inventory, for those sites pushed the openings back by a few months, Daintith said.
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Kroger and Ocado are moving forward with advancing their partnership after months of stifled development.
Dive Insight:
Ocado Chairman Adam Warby told investors that while the company is seeing growth across many of its customer fulfillment centers around the world, “we recognize that that is behind our expectation and the expectation of partners.”
Ocado and Kroger, which linked up for an exclusive partnership in 2018, made an initial commitment to build capacity equivalent to 20 CFCs across the U.S. but so far have only opened eight, according to Ocado’s website. Several investors questioned how the Kroger partnership is coming along during the Thursday call.
“There isn’t a bad relationship with Kroger,” Ocado CEO Tim Steiner said during the earnings call Q&A.
Steiner continued: “Obviously, there were some other distractions that [Kroger] had before that have fallen away. And we are working very closely on these sites. We still believe the U.S. is a huge opportunity. We would like to address that huge opportunity with Kroger.”
Kroger Chairman and CEO Rodney McMullen told investors in mid-2023 that the grocer was holding off on building new e-commerce sites with Ocado “until we make sure that we have a clear path on the ones we have.”
Last year, Kroger said it would add Ocado technologies, including On-Grid Robotic Pick and Automated Frameload, to its CFCs. That announcement came months after the companies closed three spoke facilities — two in Texas and one in Florida.
After a flurry of announcements between 2020 and 2022, Kroger has remained largely silent with the public about its work with Ocado. During its third-quarter earnings call in December, the grocer said CFCs helped fuel its 18% growth in delivery sales, noting the automated centers saw a significant increase in households and trips as well as a boost in basket sizes.