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M&S will acquire a 50% share in Ocado's UK retail business for £750m. Ocado's commercial agreement with Waitrose will come to an end in 2020.

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Kroger and Ocado will open the second and third of 20 Customer Fulfillment Centres (CFC) in Central Florida and Mid-Atlantic.

Optimising new technologies

Ecommerce has been a major focus for Kroger over the last year. In 2018, Kroger announced a strategic partnership with Ocado which will see them jointly develop up to 20 automated fulfilment centres for grocery ecommerce in the US. These will optimise Ocado’s technology-led solutions. The deal gives Kroger the rights to use Ocado’s technology for grocery and other food distribution related activities in the US on an exclusive basis.

Following the announcement of the building of the first CFC in Monroe, Ohio in November 2018, the retailers are set to open two more along the East Coast. The same CFC model (an automated warehouse facility with digital and robotic capabilities), will be replicated for the two new CFCs. Through its robotic Customer Fulfillment Centres, Ocado believes that it can significantly lower the time and cost to pick an order, versus store-based picking.

Alex Tosolini, senior vice president of new business development at Kroger, commented: "Kroger is developing the retail model of the future through our exciting partnership with Ocado, a UK-based company with global ties. We will co-innovate with Ocado to develop the best possible experiences for our customers, leveraging advanced robotics technology and creative solutions”.

Source: Kroger

Entering new markets

The first CFC is located north of Cincinnati, where Kroger is based. The retailer has significant density in this area, including in the Indianapolis, Columbus and Louisville markets. However, Kroger does not currently operate any of its own stores in Florida. The strategic partnership with Ocado is enabling Kroger to expand into new areas and reach different customers. The opening of the new CFC in the area will enable Kroger to enter into a new market.   

 

Retail Analysis subscribers: read our insight reports, Strategic Outlook for Kroger and Strategic Outlook for Ocado to learn more.

The UK’s Groceries Code Adjudicator, Christine Tacon, has today (18 February) launched her annual survey, inviting suppliers to share their experiences of trading relationships with major retailers and highlight any issues they are facing.  

This year the survey – the sixth carried out by the GCA - includes Ocado and B&M, which were designated by the Competition and Markets Authority in November last year.  

Suppliers can complete the survey at www.yougov.com/gca. It will remain open until 23 April.  

Survey key to regulatory decision making  

Christine Tacon said: “The annual survey plays a huge role in my work.  It sheds strong light on the behaviour of the retailers and tells me how well they are complying with the Code.  I use the information I receive to help identify top issues and to decide where to focus my discussions with the businesses I regulate.  

“Thanks to the large numbers of suppliers who have taken part in previous years I have been able to delve deeper into specific issues, identifying particular challenges for individual retailers to work on.

“I need all sectors and sizes of groceries suppliers to complete my survey so please take the time to fill it in, and I welcome a cross-section of views from within suppliers. I am hoping as in past years to receive more than 1,000 replies from suppliers.”    

Confidentiality assured

The independent polling company YouGov runs the survey on behalf of the GCA so suppliers can be confident the information they provide is treated in complete confidence.  YouGov collects and analyses the answers and will present the results at the GCA annual conference, which will be held on 24 June in Westminster.  Registration for the conference is now open at: www.gov.uk/gca.

Online grocery retailer Ocado is to trial a one-hour delivery service in London next month.

Ocado Zoom

The one-hour delivery service, Ocado Zoom, is set to launch in March in west London initially, with plans to expand the service if customer feedback is positive.

Around 10,000 products will be available to customers for delivery within one hour. The service will cater for smaller basket sizes of less than £60 versus Ocado’s average order size of £107.

Ocado Zoom is in response to a number of retailers that are introducing rapid delivery offers, including Amazon Prime Now, Sainsbury’s Chop Chop delivery, and Waitrose Rapid Delivery. If Ocado is to continue to sell the delivery platform, it will need to consider a solution for rapid deliveries in densely populated cities.

Responding to shopper needs

As shopper demand and expectations continue to rise, increasingly we are seeing online retailers invest in improving their delivery standards, not only offering same day delivery, but also more immediate solutions for shoppers. Ocado will join a number of online retailers offering fast delivery options, tapping into the trend of creating more convenient solutions for customers.

 

For more information on Ocado, subscribers to Retail Analysis can view and download our Strategic outlook for Ocado report here.

Presentations

11/03/2019
We review and compare Ocado’s new one-hour delivery service and highlight the opportunities for manufacturers
01/03/2019

An essential summary of trading priorities, latest developments, and other key commercial insights for Ocado.

27/02/2019
We explore the new M&S and Ocado joint venture and explain the rationale and the implications for the industry.
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