Kroger, which had sales of $122 billion in its last fiscal year, will take a 5 percent stake in the British online delivery firm as part of the agreement.
Luke Jensen, CEO of Ocado Solutions, told CNBC’s Joumanna Bercetche on Thursday that getting into the U.S. market would prove a tremendous opportunity as Americans warmed to the idea of online deliveries.
“The grocery online market in the U.S. has been relatively underdeveloped compared with some European markets. It represents less than 2 percent of the total grocer market, versus 7.5 percent in the U.K., but is now growing very fast and is an enormous growth market,” he said.
Jensen added that the recent Amazon tie-up with Whole Foods proved that the U.S. grocery market is changing and that people want to both order online and shop in-store.
The Ocado CEO said his firm will work with Kroger to roll-out up to 20 robotic warehouses across the U.S. over the first three years of the agreement.
The deal is the latest in a series of tie-ups announced by Ocado recently. It has already inked agreements with Sweden’s ICA, Canada’s Sobey’s and French supermarket operator Casino.
Jensen told CNBC he was “very comfortable” that the necessary financing is in place to fulfil all of the contracts.
US grocer Kroger’s online delivery deal sends Ocado shares rocketing