Kroger can move to next level by snapping up Ocado

US retailer Kroger should think big and acquire its UK-based online delivery partner Ocado, according to Brittain Ladd, a former Amazon exec and supply chain consultant.

Ladd was speaking as it emerged that Ocado plans to raise more than £1 billion from investors, taking advantage of a boom in online deliveries sparked by the coronavirus pandemic.

“One of the things I’m most proud of is that I recommended to Kroger to partner with Ocado. I made my opinion known in articles as early as 2015 and when I worked as a consultant at Kroger in 2017 and 2018,” Ladd said in a LinkedIn post.

Kroger, he believes, should not only buy Ocado but also make its head honcho, Tim Steiner, CEO of the combined companies. They could then build a new customer fulfilment centre (CFC) design that can fulfil online grocery orders; assemble Click and Collect orders; and build pallets so that the CFCs can replenish direct to stores. (Kroger could shut its older and manual warehouses).

Next up, they could approach Walgreens and the major brands that sell products in Kroger’s stores, and have them put all of their inventory into Ocado CFCs. Ocado could replenish direct to Walgreens stores; replenish Kroger’s stores; and fulfil online orders for all brands and Walgreens.

Other options include merging with Target or Ahold Delhaize to grow the store and CFC network and opening separate Ocado CFCs to fulfil orders for retail and companies in other industries.

“Only Tim Steiner can take Ocado and Kroger to the next level,” Ladd concluded.