Ocado shares have slumped after its US partner Kroger revealed it would be taking a “hard look” at its automated warehouse technology.
The group’s shares dropped by as much as 11% during early trading.
Ocado joined forces with Kroger in 2018, with the companies initially planning to build 20 robotic customer fulfilment centres throughout the US.
Eight sites have been opened so far, with an additional two forecast to launch during the current financial year.
However, on Thursday (11 September), Kroger bosses told US investors they were reviewing their use of the automation technology in a bid to cut costs and boost profitablilty.
Related Story
The US retailer said it would conduct a site-by-site analysis of its automated fulfillment centres, adding that it planned to focus more on fulfilling orders straight from shops to boost efficiency and speed.
Kroger interim CEO Ron Sargent said: “Where we have seen strong demand in high-density areas, these facilities deliver better results than those facilities where density is lower and customer adoption has been slower.
“We are taking a hard look at some of our automated facilities.”
In July 2024, Ocado bolstered its partnership with Kroger with a new range of automated technologies to roll out across the US retailer’s customer fulfilment centres.
Kroger placed an order for Ocado’s ‘Re:imagined’ technologies to be implemented across multiple of its existing and future warehouses.
Click here to sign up to Retail Gazette‘s free daily email newsletter
