INSUBCONTINENT EXCLUSIVE:
Image copyrightNewscastShares in online grocer Ocado have surged by 44% after it struck a deal with US retail giant Kroger.Ocado's
technology will be used in the US exclusively by Kroger, which is one of the world's biggest grocery chains with annual sales of $122bn
has struck with retailers to share its technology that automates online grocery orders, The Kroger deal is the fourth agreement Ocado has
reached in six months, and marks its first foray into the US.Shares in Ocado started the day worth 552p, rose at one point to 995p, and
ended the day worth 797p.James Lockyer, analyst at Peel Hunt, says that one of the reasons that Ocado's deal with Kroger is so
"transformational" is because of the sheer number of robotic warehouses that British company could build for its new US customer
Under its agreements with Group Casino of France and Canada's Sobeys it will build one automated warehouse for each, under the deal with
Kroger Ocado will build between three and 20
Ocado and Kroger are already looking to identify the first three sites for automated warehouse facilities in the US, and are aiming for up
to 20 sites over the first three years of the agreement.As the deal with Kroger is exclusive, Ocado said it would now end talks with other
US-based retailers.In the past few months, Ocado has struck a deal to share its technology with with ICA Group in Sweden
It also operates the online business of the UK's fourth largest supermarket, Morrisons.'Ocado is making great strides in the global grocery
market," said Laith Khalaf, senior analyst at Hargreaves Lansdown."The company is known in the UK as an online supermarket, but that's just
the tip of the iceberg, as Ocado is primarily a technology and logistics firm with the potential to license out its services to grocers
around the world."Indeed there seems to be a bit of a queue forming, made up of those who want to play catch-up in the digital retailing
age, and consequently Ocado now has a foothold in the hugely important US market, as well as the UK, France and Canada."Ocado was set up in
2000 by former Goldman Sachs bankers Tim Steiner, Jonathan Faiman and Jason Gissing - though Mr Steiner and Mr Faiman had known each other
help build Ocado's distribution base in Hertfordshire.In return, Waitrose supplied Ocado and took a 40% in the fledgling business.For years
Ocado was criticised for not making a profit and when it first sold shares on the stock exchange in 2010 it had to cut the offer price.Also,
for a long time, there were questions about how Ocado could expand its business given its contractual ties to Waitrose
Steiner is the only member of the founding trio to remain at Ocado, where he is chief executive.Mr Gissing retired in 2014, while Mr Faiman
departed in 2009 and has since entered the oil industry by investing in and becoming chairman of exploration group Neos.
