Ocado exclusivity with most foreign retailers ends, paving way to new partners

By Ankita Bora and Pushkala Aripaka

Dec 30 (Reuters) - Ocado said on Tuesday the exclusivity of its agreements to provide retailers including U.S. grocery chain Kroger with pickup and dispatch technology has ended in most markets as previously signalled, allowing it to sign on more partners.

The British group sells retailers its cutting-edge technology, which allows them to pick and dispatch online food orders from vast robotic warehouses, typically for 12 months in exclusive contracts.

But in recent years, Ocado has faced pressure from rivals like DoorDash and Instacart, despite having had a head-start on both, as companies increasingly look for faster and cheaper shipping options.

The British technology group said in its half-year results in July that it expected to roll off exclusivity arrangements by the end of the year in the majority of markets.

Besides Kroger, Ocado has 12 other international partners, including Aeon in Japan, Lotte Shopping in South Korea, and Coles in Australia. 

The company did not provide details on which other exclusivity agreements had expired. Its partnerships in Britain were unaffected.

Ocado now expects to start new commercial activity in several international grocery markets, it said.

"As we continue to support all of our partners to improve and grow their online businesses, we will also now bring the full range of Ocado's AI-powered and robotic solutions back to multiple markets," CEO Tim Steiner said in a statement.

Ocado shares were down 0.4% at 238.8 pence by 0927 GMT on Tuesday, having earlier risen as much as 2.2%.

Its shares have tumbled about 22% this year as some analysts questioned Ocado's ability to pick up more business.

Its challenges were underscored in November when Kroger, Ocado's most important partner, decided to close three of the eight automated warehouses it built with the group. 

(Reporting by Ankita Bora and Pushkala Aripaka in Bengaluru; Editing by Nivedita Bhattacharjee and Jan Harvey)