Ocado, the online supermarket chain turned technology company, has signed a major deal with USA supermarket chain Kroger that could see Ocado technology powering as many as 23 Kroger fulfilment warehouses across the US.
Kroger shares closed higher Thursday as the U.S. grocer announced it has agreed an exclusive deal with United Kingdom grocer Ocado, to use its online shopping tech in the US. Kroger will grow its existing investment in Ocado by 5 percent in a subscription rights agreement, bringing its total investment to more than 6 percent.
Tatton-Brown said the detailed financial terms still had to be agreed, but the deal was expected to be neutral in respect to earnings in the full-year 2018.
Ocado said its "transformative" entry into the U.S. market centred on sharing its technology with Kroger, which had annual sales of $122bn (£90.4bn) in 2017.
"Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world", he commented.
The deal is the latest in a series of tie-ups announced by Ocado recently.
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The company claimed the value of the Kroger partnership was worth more than the others in France, Canada and Sweden combined.
Rodney McMullen, chairman and CEO of Kroger, said the retailer is on a mission to develop new customer experiences by investing in technology.
The two companies are working to identify the first three sites in 2018. Ocado Solutions CEO Luke Jensen is certainly intrigued by the opportunity at hand, noting that the "grocery online market in the US has been relatively underdeveloped compared with some European markets".
Ocado's technology automates the processing and packing of online grocery orders, using hundreds of robots in technologically advanced order fulfillment centers.
Ocado shares were trading nearly 80% higher on Thursday afternoon - reaching £10 per share at one stage. "Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer experience". He is also a beneficiary of the Millennium Trust, which owns a separate 2.4pc stake in Ocado, according to Bloomberg data. If the retailer fails to hit volume targets it could also lose exclusivity and will have to pay compensation to Ocado.
Bearish hedgies ate humble pie, with those shorting Ocado registering as much as a £282m paper loss at one point in the day, before shares eased back.