UK-based delivery service Ocado has confirmed that it will open 20 distribution centres in the US over the next three years, as part of its service agreement with US retailer Kroger.
Ocado and Kroger agreed the services partnership in May 2018, and the deal will give Kroger access to Ocado’s Smart Platform technology, allowing Kroger to enhance its home delivery, online ordering and automated fulfilment activities in the face of increasing competition from Amazon and Walmart in the home delivery space.
The deal represents Ocado’s entry into the US market, and Kroger is expected to order the first three high-tech ‘Customer Fulfilment Centres’ (CFCs) by the end of 2018.
Kroger will issue further details on the location of the first three CFCs within the next few weeks, and Ocado estimates that CFCs will become operational approximately two years after an order is placed, meaning the first sites would become operational around 2020.
Ocado will be responsible for the installation and maintenance of Mechanical Handling Equipment at the plants, in order to provide a sufficient level of processing capacity.
Luke Jensen, CEO 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”.
Alex Tosolini, Kroger’s senior vice-president of business development added: “This is a significant step toward both solidifying our partnership with Ocado and redefining the Kroger customer experience.
“The alliance will bring to the US Ocado’s unparalleled innovation and technologies. This is exciting news and will help accelerate our vision to serve America through food inspiration and uplift.”
© FoodBev Media Ltd 2019