Ocado boosted as partner Kroger orders new automated technologies

By James Davey

LONDON (Reuters) -British online supermarket and technology group Ocado said on Monday its U.S. partner Kroger had placed an order for a wide range of new automated technologies to roll out in warehouses across its network.

Ocado shares slumped last month after its Canadian supermarket partner Sobeys paused the opening of a fourth robotic warehouse, but have since recovered as Japanese partner Aeon committed to build a third warehouse and Ocado raised its annual financial guidance.

The stock rose 7.1% in early trading, paring year-on-year losses to 41%.

Ocado said Kroger will implement its latest technologies such as On-Grid Robotic Pick (OGRP) and Automated Frameload (AFL) across multiple warehouses - or customer fulfilment centres (CFCs) as Ocado calls them - in its live network as well as in future CFCs.

Ocado did not put a value on the order from Kroger, its most important partner.

OGRP is a robotic arm that is installed directly on a warehouse's grid. Robots operating on the grid deposit groceries next to the robot arms to be packed into customer bags.

At full capacity, OGRP can pick more than 70% of an extensive online grocery range, Ocado said.

AFL automates the loading of prepared customer orders onto delivery frames ready for dispatch - the most physically demanding job in the warehouse.

Ocado said both technologies will bring new levels of efficiency and labour productivity to Kroger's delivery network.

Last week, Ocado CEO Tim Steiner said investors should not lose confidence in its model, noting the global channel shift to online had resumed.

Ocado is facing a refinancing of its debt from the end of 2025.

Analysts at Jefferies said the Kroger and Aeon orders together with the raised guidance had put Ocado "into a much stronger position into this critical catalyst for the equity".

(Reporting by James Davey; Editing by Kate Holton and Sarah Young, Kirsten Donovan)