The way forward for under pressure Ocado Group is Instacart and DoorDash MFCs tie ups
Ocado Group’s shares tumbled on Tuesday after US grocer Kroger said it would close three underperforming warehouses developed using the UK company’s technology.
Ocado Group will miss out on $50 million of revenue in its current financial year as a result of the closures. It will receive $250 million in compensation, while Kroger expects to incur about $2.6 billion in impairments because of the closures and its automated warehouses not meeting financial expectations.
All is not lost for Ocado Group, however, according to Brittain Ladd, a supply chain consultant and former Amazon executive.
In a LinkedIn post, he said: “The company may have given itself a black eye because of the closure of three CFCs at Kroger, but it has customers globally who are quite happy with the technology and relationship with Ocado.”
“It is facing severe challenges at Kroger because they're in the process of searching for their next CEO and until the role is filled, Ocado's future at Kroger is unclear. I believe the next CEO will cancel the two planned CFCs for 2026, and they'll assess the value of Ocado thoroughly.”
Ladd argues that Ocado should do the following immediately:
1. Partner with DoorDash and/or Instacart to provide automated MFCs and smaller, more affordable CFCs to fulfill online groceries.
2. Present a plan to Kroger to replace or supplement the remaining CFCs with smaller, strategically located MFCs.
And Kroger? “According to a senior executive at Kroger, “Ron Sargent (Chairman of the Board of Directors) should fire everyone involved in the Ocado project who made such terrible decisions beginning with Yael Cosset, our EVP and Chief Digital and Technology Officer.” Ocado isn't the only option for us or other grocery retailers,” Ladd noted.
In his opinion, H-E-B currently has the most advanced automated network of MFCs using technology from AutoStore. In a partnership with Swisslog, HEB has opened nine MFCs. It’s possible that it could launch Fulfillment by HEB.
Veloq and AutoStore, meanwhile, have partnered to provide retailers with automated MFCs. It's a successful collaboration and Veloq recently entered the USA.
Elsewhere, Amazon and Fulfil have partnered to pilot MFCs inside several Whole Foods Markets. They plan to offer their MFCs to other retailers. “It's a complex and costly system. Amazon has built their own MFC that can pick ambient temperature products. I estimate that Amazon will open hundreds of standalone MFCs,” Ladd said. “Note: Amazon tried to acquire AutoStore in 2024 but AutoStore declined”
Symbotic has a $5 billion contract with Walmart to install 600 MFCs inside the retailer’s stores beginning in 2026. How many actual MFCs are built will depend on the results of the pilots.
Ladd concluded: “Oda Systems, led by Isabelle Baumann, is the anti-Ocado. It has designed Lean Fulfillment Centres using a methodology similar to Toyota's Lean Manufacturing. Oda's LFCs significantly reduce the costs and complexity of online grocery fulfillment while providing comparable throughput similar to large automated sites. Its solution is the lowest cost and most practical option for online grocery fulfillment. DoorDash, Instacart and grocery retailers should assess the solution.”
“The use of automation for online grocery fulfilment will continue to increase. The project between Kroger and Ocado failed because of poor leadership and a failure to understand the needs of consumers, and not a failure of the technology.”
Ocado Group did not respond to our request for comment.
2025 RTIH INNOVATION AWARDS
Online grocery fulfilment was a key focus area at the 2025 RTIH Innovation Awards.
We received a record number of entries and many fantastic examples of the continued resilience and dynamism of the retail space during hugely challenging times.
For a full rundown of all of the shortlisted entries, click here.
Our 2025 hall of fame entrants were revealed during a sold out event which took place at The HAC in Central London on 16th October and consisted of a drinks reception, three course meal, and awards ceremony presided over by award winning comedian, actress and writer Tiff Stevenson.
In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “This is the awards’ fifth year as a physical event. We started off with just 30 people at the South Place Hotel not far from here, then moved to London Bridge Hotel, then The Barbican, and last year RIBA’s HQ in the West End.”
“But I’m conscious of the fact that, to quote the legend that is Taylor Swift, You’re only as hot as your last hit, baby. So, this year we’ve moved to our biggest venue yet, and also pulled in our largest number of entries to date and broken attendance records.”
He added: “This year’s submissions have without doubt been our best yet. To quote one of the judges: The examples of innovative developments across both traditional and digital retail spaces were truly remarkable.”
Congratulations to our winners, and a big thank you to our sponsors, judging panel, the legend that is Tiff Stevenson, and all those who attended our 2025 gathering.
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