- Kroger to Pay Ocado $350M After Closing Automated Warehouses
LONDON – British technology firm Ocado Group will receive a $350 million cash payment from its U.S. partner Kroger after the supermarket giant decided to scale back its network of automated warehouses.
The announcement on Friday confirmed that Kroger will close three fulfilment centers and cancel the construction of another.
According to the statement released Friday, the one-off payment, scheduled for January 2026, is to compensate Ocado for future fees lost from Kroger’s decision to “optimise its CFC network.” Three active customer fulfilment centers (CFCs) are set to close in January 2026, and a planned site in Charlotte, North Carolina, will not be built.
Despite the closures, both companies stated their partnership will continue at five remaining live CFCs across Ohio, Texas, Georgia, Colorado, and Michigan. Ocado noted it would continue to support these sites and roll out new technology, including its ‘AutoFreezer’ system in a forthcoming Phoenix, Arizona, location.
The decision will impact Ocado’s future earnings, with the company expecting a reduction in fee revenue of approximately $50 million in its 2026 fiscal year due to the closures.
However, Ocado reaffirmed its goal of becoming cash-flow positive during the same period.
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