{"id":43412,"date":"2025-09-12T11:36:23","date_gmt":"2025-09-12T11:36:23","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/09\/12\/ocado-shares-sink-11-as-kroger-reviews-warehouse-strategy\/"},"modified":"2025-09-12T11:36:23","modified_gmt":"2025-09-12T11:36:23","slug":"ocado-shares-sink-11-as-kroger-reviews-warehouse-strategy","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/09\/12\/ocado-shares-sink-11-as-kroger-reviews-warehouse-strategy\/","title":{"rendered":"Ocado shares sink 11% as Kroger reviews warehouse strategy"},"content":{"rendered":"
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Ocado\u2019s share price fell sharply on Friday after US grocery partner Kroger signalled a strategic rethink of its warehouse investments, triggering concerns over the British online grocer\u2019s growth prospects in the world\u2019s largest retail market.<\/p>\n

The stock dropped more than 11% in London trading, extending a recent slide that has wiped nearly a quarter of its market value in the past month. <\/p>\n

The latest decline came after Kroger\u2019s interim chief executive Ron Sargent suggested the company may rely more heavily on existing stores rather than building new automated sites.<\/p>\n

\u201cThe bulk of our e-commerce is done by stores today,\u201d Sargent told analysts on the US supermarket group\u2019s second-quarter earnings call.<\/p>\n

Kroger\u2019s cautious stance raises questions for Ocado but JPMorgan stays bullish<\/h2>\n

Ocado struck its landmark deal with Kroger in 2018, providing robotic warehouses, known as Customer Fulfilment Centres (CFCs), to support the American grocer\u2019s online delivery expansion. <\/p>\n

The partnership has been central to Ocado\u2019s international growth ambitions.<\/p>\n

However, Kroger\u2019s comments raised doubts about the pace of new investments. <\/p>\n

Barclays analysts described the tone on CFC investment as \u201ccautious,\u201d noting an increased emphasis on using the store footprint. <\/p>\n

JPMorgan said Kroger will conduct a \u201csite-by-site review\u201d of existing and planned CFCs, with the results expected later this quarter.<\/p>\n

Neil Wilson, a UK-based market strategist, called the development \u201ca clear negative for Ocado,\u201d as it suggests Kroger may pivot more towards in-store fulfillment.<\/p>\n

Still, JPMorgan argued that Ocado remains attractive given the global shift towards online grocery. <\/p>\n

With Kroger\u2019s exclusivity arrangement waived, the broker sees scope for Ocado to strike deals with other US retailers as well as operators in Asia and the Middle East. <\/p>\n

JPMorgan maintains an \u201coverweight\u201d rating, while Barclays remains \u201cunderweight.\u201d<\/p>\n

Losses overshadow revenue growth pulling shares down <\/h2>\n

The pressure on Ocado\u2019s stock has persisted despite steady revenue growth. <\/p>\n

Last year, revenue climbed to \u00a33.16 billion, up from \u00a32.8 billion a year earlier.<\/p>\n

Technology solutions revenue rose 15% to \u00a3277 million, while logistics revenue advanced 12% to \u00a3397 million.<\/p>\n

Ocado Retail, its joint venture with Marks & Spencer, also posted a 16% rise in sales to \u00a31.6 billion in the first half. <\/p>\n

Gross profit increased 15% to \u00a3509 million, with average orders per week climbing 14% to 491,000 and the average basket value rising to \u00a3124.<\/p>\n

Despite this, losses remain a drag. <\/p>\n

The company reported a pre-tax loss of \u00a3375 million last year, only a marginal improvement from \u00a3394 million the year before. <\/p>\n

Ocado has, however, managed to narrow its underlying cash outflow, reducing it to \u00a3108 million in the first half from \u00a3201 million a year earlier. <\/p>\n

The group reaffirmed guidance and said it expects to turn cash flow positive next year.<\/p>\n

Analysts see downside risk but technical upside<\/h2>\n

Technical analysts warn that Ocado\u2019s share price remains in a downward trend. <\/p>\n

According to Invezz\u2019s financial analyst Crispus Nyaga<\/a>, the stock has stayed below the 100-week Exponential Moving Average, with repeated attempts to rebound failing. <\/p>\n

The Relative Strength Index is also close to slipping below the neutral 50 mark.<\/p>\n

However, Nyaga pointed out that the stock has formed a falling wedge pattern on the weekly chart, often considered a bullish setup. <\/p>\n

He predicts the share price could fall another 25% to 250p before rebounding later next year. <\/p>\n

Alternatively, a break above resistance at 395p could signal a renewed uptrend.<\/p>\n

For now, Kroger\u2019s review looms large over Ocado, with investors awaiting clarity on whether the U.S. grocer will scale back its warehouse strategy \u2014 a decision that could reshape Ocado\u2019s international ambitions.<\/p>\n

The post Ocado shares sink 11% as Kroger reviews warehouse strategy<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Ocado\u2019s share price fell sharply on Friday after US grocery partner Kroger signalled a strategic rethink of its warehouse investments, triggering concerns over the British online grocer\u2019s growth prospects in the world\u2019s largest retail market. The stock dropped more than 11% in London trading, extending a recent slide that has wiped nearly a quarter of <\/p>\n","protected":false},"author":1,"featured_media":43413,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-43412","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/43412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=43412"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/43412\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/43413"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=43412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=43412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=43412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}