Ocado’s shares tumbled 13% on Friday after U.S. retail giant Kroger signaled a possible pullback from its investment in robotic fulfilment centres, raising doubts over one of Ocado’s most important international partnerships.
Kroger’s interim CEO Ron Sargent, who launched a strategic review of the company’s e-commerce operations in June, told investors the retailer was conducting a “site-by-site” analysis of its automated warehouse network, developed with Ocado since 2018. He said the company was “taking a hard look” at some facilities and stressed that fulfilling online orders from stores would remain a priority.
The remarks fueled investor concerns that Kroger might slow or scale back its rollout of Ocado’s customer fulfilment centres (CFCs). The 2018 deal had earmarked 20 U.S. sites, but only eight are operational, with two more in Charlotte and Phoenix slated to open in early fiscal 2025–26.
Barclays analysts described Kroger’s tone as “cautious,” noting greater emphasis on leveraging existing store footprints.
Ocado, however, sought to downplay fears, pointing to positive e-commerce growth trends flagged in Kroger’s Q2 results and stressing continued collaboration on technology and operations. CEO Tim Steiner has previously insisted that the U.S. remains a “huge opportunity,” though he declined to confirm whether the exclusivity element of the Kroger deal would remain in place after this year.
Ocado shares are now down 18% over the past year, and Kroger is expected to provide a fuller update on its review in the third quarter.