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Online Retailer and Tech Firm Ocado The company has secured a compensation payment of US$350 million (£262 million) following its US partner’s decision to scale back robotic warehouse plans.
Ocado said US retail giant Kroger would make a one-time cash payment in January, sending shares soaring 16% in early trading on Friday, before the stock later closed nearly 10% higher.
This follows last month’s announcement that Kroger will close three warehouses and scrap plans for a site in Charlotte, North CarolinaWhich was one of the two to be launched in 2026.
The news caused Ocado’s shares to fall sharply that day, with Ocado warning that it would hit fee revenues for this financial year by around US$50 million (£38 million).
But the compensation payment is more than the $250 million (£190 million) Ocado originally said it expected to get.
The group will continue to operate five sites for Kroger in Monroe, dallas, atlanta, denver And Detroit.
It will also continue to support Kroger in driving logistics operations and profitable sales volume growth across remaining sites.
Ocado Group chief executive Tim Steiner said: “We continue to invest significant resources in supporting our partners at Kroger and helping them build on our long-term partnership.
“Ocado’s technology has evolved significantly to incorporate the new technologies that Kroger is currently deploying across its customer fulfillment center network, as well as new fulfillment products that bring Ocado’s technology to a wider range of applications, including store based automation to support ‘pick up’ and immediacy.”
He said: “We are excited about the opportunity for Ocado’s developed products in the US market.”
Ocado launched a key partnership with Kroger, one of the largest US supermarket chains, in 2018.
Initially, the companies agreed to build the equivalent of 20 customer fulfillment centers where automated robots sort orders, but eight sites have opened so far.
But Kroger’s bosses told investors in the US earlier this year that they were reviewing the use of automation technology as part of efforts to reduce costs and improve profitability.
Kroger said it plans to focus more on fulfilling orders directly from stores to improve speed and efficiency.
As well as its global retail technology business, Ocado also runs an online grocery firm as a joint venture with Marks & Spencer.
The group made a pre-tax profit of £611.8 million for the six months to June 1, wider than a loss of £153.3 million a year earlier, as it benefited from the revaluation of its stake in the Ocado retail business.