Ocado shares extend decline after Kroger setback

MILAN (Reuters) -Shares in Ocado fell further on Wednesday, adding to 17% slump the day before, after its partner Kroger announced the closure of three U.S. delivery facilities centres, in a blow for the British online supermarket.

The stock hit a fresh 12-year low in early London trading before paring some of those losses. By 0824 GMT, it was down 5% at 172.6 pence, while the broader FTSE 100 was just slightly lower on the day.

Ocado, which partnered with Kroger in 2018 to deploy its Smart Platform for automated fulfilment centres, will receive over $250 million in compensation, but expects an impact of about $50 million for its fee revenue in fiscal year 2026.

JPMorgan cut its Ocado target price to 290 pence from 356 pence. 

Bernstein said on Tuesday it expected Kroger to cancel two more facilities scheduled to open next year and believes Ocado will struggle to secure additional significant partnerships in the U.S. following the Kroger setback.    

Kroger expects the closures to have no impact on its core sales.  

(Reporting by Danilo Masoni; Editing by Amanda Cooper)