LONDON (Reuters) -Shares in Ocado ( OCDGF ), the online supermarket and technology group, fell sharply on Friday after U.S. partner Kroger ( KR ) signalled a potential retreat from investment in automated warehouses.

The stock was down 13% at 1140 GMT, extending losses over the last year to 18%, after Kroger's ( KR ) chairman and interim CEO Ron Sargent said the company was conducting a "site-by-site" review of its automated fulfilment network, built in partnership with Ocado ( OCDGF ).

The comments sparked concerns that Kroger ( KR ) may be cooling on plans to expand its network of robotic customer fulfilment centres (CFCs), a core part of Ocado's ( OCDGF ) international growth story.

Sargent, who succeeded long-time boss Rodney McMullen in March, launched a strategic review in June of the group's e-commerce operations.

On Thursday, he told investors: "We're examining all aspects of our business to drive greater efficiency, including a full site-by-site analysis of our Kroger ( KR ) automated fulfilment network."

"We are taking a hard look at some of our automated facilities," he said.

Sargent also stressed the importance of fulfilling e-commerce delivery from stores.

Ocado ( OCDGF ) struck a deal with Kroger ( KR ) in 2018 to help the U.S. retailer ratchet up its delivery business with the construction of robotic warehouses, or CFCs as Ocado ( OCDGF ) calls them.

The initial deal saw Kroger ( KR ) identify 20 U.S. sites to build warehouses, making the group Ocado's ( OCDGF ) most important partner.

However, so far, only eight sites have gone live, with a further two in the cities of Charlotte and Phoenix not due to open until early in Ocado's ( OCDGF ) 2025-26 financial year, which starts in December.

"We thought the tone on CFC investment was cautious, with more focus seemingly on using existing store footprint," Barclays analysts said of Sargent's comments.

A spokesperson for Ocado ( OCDGF ) said Kroger ( KR ) had highlighted in its second-quarter results on Thursday positive trends for growth and profitability in e-commerce.

"We are continuing to work closely with Kroger ( KR ) to drive this further and have made positive progress with the implementation of our new technology and the work of our Partner Success teams," the spokesperson added.

Kroger ( KR ) said it plans to update on its review during the third quarter.

In July, Ocado ( OCDGF ) CEO Tim Steiner told Reuters he was confident Kroger ( KR ) would grow its e-commerce business under Sargent.

He said the U.S. remained "an enormous ongoing opportunity" for Ocado ( OCDGF ).

But he declined to comment on whether the exclusivity element of its deal with Kroger ( KR ), which is conditional on growth, would roll off later this year.