US-based retailer Kroger has entered a service and operational agreement with UK online supermarket Ocado Group to develop customer fulfilment centres (CFCs).
Under the deal, Kroger will place an order for 20 CFCs over the first three years, with the first three orders placed by the end of 2018. Ocado will develop and operate the CFCs.
Ocado Solutions CEO Luke Jensen said: “We are delighted to have signed this services agreement with Kroger which sets out the key parameters for our working relationship going forward.
“The Kroger and Ocado teams have been working hard for some time to prepare for the opening of the first CFCs in the United States.
“We are very excited at the prospect of helping Kroger bring new services and value to its customers and transform the food retail market in the US.”
In addition, the online retailer is due to invest around £90m for the first three CFCs and more than £500m for the remaining centres through funding arrangements.
The company will install and maintain modules of mechanical handling equipment (MHE) for required throughput and is planning to deliver Kroger’s CFCs within two years of the order.
Kroger business development senior vice-president Alex Tosolini said: “This is a significant step toward both solidifying our partnership with Ocado and redefining the Kroger customer experience.
“The alliance will bring to the US Ocado’s unparalleled innovation and technologies. This is exciting news and will help accelerate our vision to serve America through food inspiration and uplift.”