Breakaway

Britain’s Robot Grocer Is Coming to the U.S.

Ocado is starting to thrive by selling its online shopping technology overseas to companies like Kroger.
Illustration: Tomi Um for Bloomberg Businessweek

In a warehouse an hour west of London, robots zip across a grid of thousands of crates filled with groceries, picking up cartons of milk, heads of broccoli, tubs of lemon sorbet, cans of tomato soup, and whatever else Britons might want for dinner. The hundreds of robots—imagine a cross between R2-D2 and a dorm fridge—pluck the food and skitter over to banks of workers who pack the items into red plastic boxes for delivery to customers’ homes. “Designing it all has been immensely complex,” says Tim Steiner, chief executive officer of Ocado Group Plc, the fast-growing online grocer that owns the facility. “The infrastructure, technology, and software we needed didn’t exist, so we created it.”

The system has caught the eye of American supermarket giant Kroger Co., which in May bought 6 percent of Ocado and hired it to build and operate up to 20 distribution hubs as Kroger takes on Walmart Inc. and especially Amazon.com Inc. in e-commerce. Kroger hasn’t settled on details of the rollout but expects to start shipping groceries from an Ocado-run warehouse in two years. “There’s no doubt that Ocado’s infrastructure is the best way for Kroger to deliver,” says Kroger CEO Rodney McMullen.