(Reuters) -Shares in British online supermarket and technology group Ocado slumped on Tuesday after U.S. partner Kroger said it would close three automated warehouses in January. Ocado stock was down 14.5% at 1434 GMT as it also said its fee revenue will reduce by about $50 million next year as a result of the closures. […]
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Ocado slides as US partner Kroger says it will close three robotic warehouses
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(Reuters) -Shares in British online supermarket and technology group Ocado slumped on Tuesday after U.S. partner Kroger said it would close three automated warehouses in January.
Ocado stock was down 14.5% at 1434 GMT as it also said its fee revenue will reduce by about $50 million next year as a result of the closures.
Ocado struck a deal with Kroger in 2018 to help the U.S. retailer ratchet up its delivery business with the construction of robotic warehouses, or customer fulfilment centres (CFCs) as Ocado calls them.
The initial deal saw Kroger identify 20 U.S. sites to build warehouses, making the group Ocado’s most important partner.
However, so far, only eight sites have gone live.
Ocado said it expected to receive compensation for fees related to the early closure of the three sites of more than $250 million.
(Reporting by James Davey in London and Raechel Thankam Job in Bengaluru; Editing by Shreya Biswas and Paul Sandle)