Published by Global Banking & Finance Review®
Posted on February 27, 2025
2 min readLast updated: January 25, 2026
Add as preferred source on GoogleOcado remains optimistic about Kroger's U.S. warehouse expansion despite delays, with plans for more sites and potential partnerships.
By James Davey
LONDON (Reuters) - Ocado, the British online supermarket and technology group, is confident its U.S. grocery partner Kroger will eventually open "a significant number" of automated warehouses despite a slowdown in the roll-out of sites, Ocado's boss said.
Ocado struck a deal with Kroger in 2018 to help the U.S firm ratchet-up its delivery business with the construction of robotic warehouses.
The initial deal saw Kroger identify 20 sites to build automated warehouses, or customer fulfilment centres (CFCs) as Ocado calls them, in the United States, making the group Ocado's most important partner.
However, so far only eight sites have gone live, with a further two now not due to open in Charlotte and Phoenix until early in Ocado's 2025-26 financial year as additional freezer technology is added to the sites.
"I expect in the long term we will see a significant number of warehouses and modules live in the U.S.," Ocado CEO Tim Steiner told reporters on Thursday after the group reported annual results that sent its shares sharply lower.
"I still believe that the U.S. is an enormous opportunity for the group and at some point in the future we'll look back and go 'wasn't it challenging for a few years' and we'll see enormous growth," he said.
Steiner said the U.S. consumer was increasingly attracted to online grocery delivery and noted that in markets where Kroger had opened sites it had seen strong sales growth despite limited marketing.
The CEO also noted that the exclusivity element of its deal with Kroger is conditional on growth.
"If we found ourselves not able to do that, we obviously would be able to operate with other partners."
Steiner also said that to reduce costs Ocado would cut some jobs, mainly in research and development areas. He said the job losses would be a "low single-digit percentage" of a global workforce of about 20,000.
(Reporting by James Davey; editing by David Evans)
Ocado struck a deal with Kroger in 2018 to assist the U.S. firm in enhancing its delivery business through the construction of automated warehouses.
So far, only eight sites have gone live, with additional sites in Charlotte and Phoenix expected to open in early 2025-26.
CEO Tim Steiner believes the U.S. represents a significant opportunity for growth, and he expects to see many warehouses operational in the future.
To reduce costs, Ocado plans to cut some jobs, primarily in research and development, which will represent a low single-digit percentage of its global workforce.
The exclusivity of Ocado's deal with Kroger is conditional on growth; if growth is not achieved, Ocado would be able to partner with other companies.
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