Ocado to receive $350 million payment from Kroger for CFC closures

Ocado Group PLC on Friday said it will receive a $350 million one-off cash payment as compensation following Kroger Co’s decision to optimise its CFC network.

Shares in Ocado rose 4.3% to 192.10 pence on Friday morning in London. Kroger traded 0.4% lower at $62.87 pre-market in New York.

The Hatfield, England-based online grocery retailer said the payment reflects Kroger’s decision to close three CFCs in Frederick, Pleasant Prairie and Groveland in January 2026.

The closure of the three live sites will reduce Ocado’s fee revenue in financial 2026 by approximately $50 million, the company said.

The payment also reflects the Cincinnati, Ohio-based retail company’s decision to not proceed with Charlotte, one of the two planned CFCs due to go live in 2026.

In 2018, Ocado launched a partnership with Kroger, which is one of the largest supermarket chains in the US.

The two companies had agreed to build the equivalent of 20 customer fulfilment centres, known as CFCs, where automated robots sort orders.

In September, bosses at Kroger told investors in the US they were reviewing their use of the automation technology in order to reduce costs and improve profitability.

Ocado said it will, alongside Kroger, continue to operate CFCs in Monroe, Dallas, Atlanta, Denver and Detroit.

It added that the rollout of its latest ’Re:imagined’ products continues across Kroger’s fulfilment network.

Ocado reiterated its aim of turning cash flow positive in financial 2026.

‘We continue to invest significant resources to support our partners at Kroger, and to help them build on our longstanding partnership,’ said Ocado Chief Executive Tim Steiner.

‘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.’

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