Grocery giant, Kroger, announced today that it has entered into an exclusive partnership with Ocado, and will use the UK-based online grocer’s logistics and warehouse technology (ROBOTS!) here in the U.S. The move indicates that Kroger is ramping up its technological efforts as it looks to defend itself against the likes of Amazon and Walmart.
Ocado is known for fast deliveries and, according to CNN Money, Ocado said it will be helping Kroger with warehouse operations, logistics, delivery route planning and automation.
On the automation front, Ocado runs giant warehouses filled with smart robots that scurry around, carrying food. Tech Insider has this video showing the robots in action:
Kroger is wasting no time getting in on that robot action. From the press announcement: “Kroger and Ocado are already working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the U.S., and will identify up to a total of 20 over the first three years of the agreement.”
This isn’t the first such deal for Ocado, which has licensed out its technology to grocery companies in France, Canada and Sweden.
Kroger has also increased its existing investment in Ocado by five percent in a subscription rights agreement, bringing its total investment to six percent.
Not living in the UK, I can’t speak to the actual quality of Ocado’s service (though the robots in the video are a sight to behold). But you have to wonder if Kroger’s move is too late.
Amazon, which is a logistics master and has its own warehouse automation, isn’t one to rest; it’s continuing to expand two-hour grocery delivery and discounts for its 100M Prime members at Whole Foods. Then there’s Walmart and Target, each of which are grow their same day delivery services. And Albertsons, which has partnered with Instacart to facilitate its own same day deliveries. And if all that wasn’t enough, there are the smaller, more focused players like Good Eggs, which just got $50 million to expand in California.
That’s not to write off Kroger’s. It’s a massive company with the capital to spend, let’s just see if it can implement that spending quickly enough.