Ocado Group has secured a one-off $350m cash payment from Kroger after the US retailer dealt Ocado a major blow by revising plans for its CFCs.
The payment compensates Ocado for Kroger’s decision to close three CFCs in January 2026 and cancel plans for a Charlotte, North Carolina, facility that was due to launch next year.
The sum, to be paid in January 2026, primarily covers foregone future capacity fees from the affected centres.
Despite the closures, the two companies continue to work closely across five operational CFCs in Monroe, Ohio; Dallas, Texas; Atlanta, Georgia; Denver, Colorado; and Detroit, Michigan.
Detroit’s capacity has been increased, with further expansion planned for 2026. Ocado’s ‘Re:imagined’ products are being rolled out across Kroger’s network, whilst its new AutoFreezer technology will debut at Kroger’s upcoming Phoenix, Arizona CFC.
While there is some solace in keeping the five plants open, investors will be disappointed that the relationship is shrinking rather than expanding.
“We continue to invest significant resources to support our partners at Kroger, and to help them build on our longstanding partnership. Ocado’s technology has evolved significantly to include both the new technologies that Kroger is currently deploying in its CFC network, as well as new fulfilment products that bring Ocado’s technology to a wider range of applications, including Store Based Automation to support ‘pick up’ and immediacy,” commented Tim Steiner, CEO of Ocado Group.
“Our partners around the world have already deployed a wide range of these fulfilment technologies to great effect, enabling them to address a wide spectrum of geographies, population densities and online shopping missions, underpinned by Ocado’s world leading expertise and R&D capabilities. We remain excited about the opportunity for Ocado’s evolving products in the US market.”
The three Kroger closures will reduce Ocado’s fee revenue by approximately $50m in the 2026 financial year.
However, the Ocado reaffirmed its target of achieving positive cash flow during FY26, supported by growth at existing and new sites alongside strict cost and capital controls.