The US grocery store chain Kroger (NYSE:KR) announced on Thursday that it would be partnering with the UK-based supermarket Ocado (LSE:OCDO).
The agreement between the two companies would allow Kroger to gain access to Ocado’s Smart Platform, which includes the ability to offer online ordering, automated fulfillment, and home delivery.
Ocado will also be able to help Kroger to enhance its digital and robotics capabilities and help to “expand [Kroger’s] seamless coverage area to provide every family in America with the convenience of shopping for anything, anytime and anywhere.”
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In conjunction with the partnership, Kroger will also increase its current investment into Ocado by 5%.
Kroger Chairman and CEO, Rodney McMullen, has said that the deal between Kroger and Ocado “will speed up [Kroger’s] efforts to redefine the food and grocery customer experience – creating value for customers and shareholders alike.”
Twenty new automated warehouse facility locations will be identified within the first three years of the agreement.
Tim Steiner, the CEO of Ocado, believes “the opportunity to partner with Kroger to transform the way in which US customers buy grocery represents a huge opportunity to redefine the grocery experience of Kroger’s customers and create value for the stakeholders of both Kroger and Ocado.”
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According to Kroger, this will not have an effect on the company’s earnings per diluted share guidance range for 2018 and 2019.
After the announcement was made, the share value of Ocado rose 44.42% on Thursday and closed at £797.20, or approximately $1077 USD. The company was able to reach a high share value of £1,000.00 and a low of £680.00.
Comparatively, Ocado closed at a share value of £552 on Wednesday, with a high of £555.20 and a low of £541.40.
The share value of Kroger rose by 1.44% and closed at $25.30 on Thursday, after reaching a high of $26.37 and a low of $25.18.
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