18th Nov 2025 14:43
(Alliance News) - Ocado Group PLC on Tuesday noted an announcement by the Kroger Co that it will close three robotic customer fulfilment centres in its live network.
Shares in Ocado dropped 16% to 183.20 pence on Tuesday afternoon in London.
In 2018, the Hatfield, England-based online grocery retailer launched a partnership with Kroger, one of the largest supermarket chains in the US.
The two companies had agreed to build the equivalent of 20 customer fulfilment centres, known as CFCS, where automated robots sort orders.
Kroger announced on Tuesday that it will close three CFCs in Frederick, Pleasant Prairie and Groveland.
Ocado said it expects it will receive compensation for fees related to the early closure of these three sites of more than USD250 million. The closures will reduce Ocado's fee revenue in financial 2026 by approximately USD50 million.
Kroger said in its announcement: "Following a comprehensive review, Kroger identified opportunities to optimise its fulfilment network by closing facilities...while monitoring the remaining facilities' performance."
In September, bosses at Kroger told investors in the US they were reviewing their use of the automation technology in order to reduce costs and improve profitability.
Ocado said it will, alongside Kroger, continue to operate CFCs in Monroe, Dallas, Atlanta, Denver and Detroit.
The company said it "continues to support Kroger to optimise logistics operations and drive profitable volume growth in these remaining sites, with constructive ongoing discussions around further use of Ocado's technology to support Kroger."
"Ocado continues to engage with Kroger on these and other matters, and expects significant growth in the US market, both with CFCs and Store Based Automation," the company added.
By Roya Shahidi, Alliance News reporter
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