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Ocado ( OCDGF ) signed deal with Kroger ( KR ) for 20 sites in 2018

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Eight sites currently live, further two to open 2025-26

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Kroger ( KR ) is reviewing e-commerce operations

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Ocado ( OCDGF ) CEO met Kroger ( KR ) boss this week

By James Davey

LONDON, July 17 (Reuters) - Ocado ( OCDGF ), the British

online supermarket and technology group, is confident its U.S.

grocery partner Kroger ( KR ) will opt to grow its e-commerce

business despite a recent change in management, Ocado's ( OCDGF ) boss

said on Thursday.

Ocado ( OCDGF ) struck a deal with Kroger ( KR ) in 2018 to help the U.S.

firm ratchet up its delivery business with the construction of

robotic warehouses.

The initial deal saw Kroger ( KR ) identify 20 sites to build

automated warehouses, or customer fulfilment centres (CFCs) as

Ocado ( OCDGF ) calls them, in the United States, 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.

Last month, Kroger's ( KR ) interim CEO Ron Sargent, who succeeded

long-time boss Rodney McMullen in March, said he was reviewing

the group's e-commerce operations.

Ocado ( OCDGF ) CEO Tim Steiner told Reuters he visited Sargent and

Kroger's ( KR ) chief digital officer Yael Cosset in the U.S. earlier

this week.

"We were together for many hours," Steiner said in an

interview after Ocado ( OCDGF ) reported first-half results.

"It's really clear from their own statements that they want

to grow their e-commerce business, and we're committed to help

them in any way we can to achieve that," he said, adding that

the U.S. is "undoubtedly an enormous ongoing opportunity for us

as a business."

However, Steiner said he could not put a timeline on when

the target of 20 sites would be achieved.

He also 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.