United States giant Kroger is Ocado's latest partner


United States giant Kroger is Ocado's latest partner

The objective of this partnership is to allow Kroger to redefine the grocery customer experience in the USA through the adoption of the centralised, automated model of online retailing provided by the Ocado Smart Platform.

According to Ocado, the partnership aims to allow Kroger to "redefine the grocery customer experience" in the U.S. by establishing a centralised, automated model of online retailing.

The deal with Kroger doesn't come as a surprise, but is "materially larger" than Bernstein had expected, with the potential for up to 20 customer fulfillment centers compared with just the one that Bernstein had envisaged as a starting point.

While the financial terms of the deal are yet to be fully ironed out, Ocado said Kroger would take a 5% stake in its business - worth approximately £183m ahead of Thursday's market opening.

Ocado has always been a target for short sellers, although bearish bets have been tapering since the United Kingdom company clinched a technology licensing deal with French supermarket operator Casino Guichard Perrachon SA in November.

Ocado CEO Tim Steiner is confident that this deal, and others like it, will "transform the shopping experience of consumers around the world".

Ocado has signed a string of similar technology deals with major supermarkets in France, Canada and Sweden.

"Our success as a retailer shows that we can offer customers unrivalled choice, quality and convenience, efficiently and profitably".

Rodney McMullen, Kroger's chief executive, said the partnership would the grocer "redefine the food and grocery customer experience - creating value for customers and shareholders alike".

With a net short position of one per cent, according to regulatory filings, Marshall Wace booked a paper loss of around £15m within minutes after Ocado shares rose 40 per cent this morning.

However, its share price is looking forward to future earnings based on licensing out its online delivery technology, rather than the revenues it's now making from food retail.

"This is a sign that the momentum is very much behind Ocado in terms of its global expansion".

The news sent Ocado's shares up 31pc in early trade to 725p.