American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Ocado shares sink 11% as Kroger reviews warehouse strategy

by admin September 12, 2025
September 12, 2025
Ocado shares sink 11% as Kroger reviews warehouse strategy

Ocado’s 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’s growth prospects in the world’s largest retail market.

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.

The latest decline came after Kroger’s interim chief executive Ron Sargent suggested the company may rely more heavily on existing stores rather than building new automated sites.

“The bulk of our e-commerce is done by stores today,” Sargent told analysts on the US supermarket group’s second-quarter earnings call.

Kroger’s cautious stance raises questions for Ocado but JPMorgan stays bullish

Ocado struck its landmark deal with Kroger in 2018, providing robotic warehouses, known as Customer Fulfilment Centres (CFCs), to support the American grocer’s online delivery expansion.

The partnership has been central to Ocado’s international growth ambitions.

However, Kroger’s comments raised doubts about the pace of new investments.

Barclays analysts described the tone on CFC investment as “cautious,” noting an increased emphasis on using the store footprint.

JPMorgan said Kroger will conduct a “site-by-site review” of existing and planned CFCs, with the results expected later this quarter.

Neil Wilson, a UK-based market strategist, called the development “a clear negative for Ocado,” as it suggests Kroger may pivot more towards in-store fulfillment.

Still, JPMorgan argued that Ocado remains attractive given the global shift towards online grocery.

With Kroger’s 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.

JPMorgan maintains an “overweight” rating, while Barclays remains “underweight.”

Losses overshadow revenue growth pulling shares down

The pressure on Ocado’s stock has persisted despite steady revenue growth.

Last year, revenue climbed to £3.16 billion, up from £2.8 billion a year earlier.

Technology solutions revenue rose 15% to £277 million, while logistics revenue advanced 12% to £397 million.

Ocado Retail, its joint venture with Marks & Spencer, also posted a 16% rise in sales to £1.6 billion in the first half.

Gross profit increased 15% to £509 million, with average orders per week climbing 14% to 491,000 and the average basket value rising to £124.

Despite this, losses remain a drag.

The company reported a pre-tax loss of £375 million last year, only a marginal improvement from £394 million the year before.

Ocado has, however, managed to narrow its underlying cash outflow, reducing it to £108 million in the first half from £201 million a year earlier.

The group reaffirmed guidance and said it expects to turn cash flow positive next year.

Analysts see downside risk but technical upside

Technical analysts warn that Ocado’s share price remains in a downward trend.

According to Invezz’s financial analyst Crispus Nyaga, the stock has stayed below the 100-week Exponential Moving Average, with repeated attempts to rebound failing.

The Relative Strength Index is also close to slipping below the neutral 50 mark.

However, Nyaga pointed out that the stock has formed a falling wedge pattern on the weekly chart, often considered a bullish setup.

He predicts the share price could fall another 25% to 250p before rebounding later next year.

Alternatively, a break above resistance at 395p could signal a renewed uptrend.

For now, Kroger’s review looms large over Ocado, with investors awaiting clarity on whether the U.S. grocer will scale back its warehouse strategy — a decision that could reshape Ocado’s international ambitions.

The post Ocado shares sink 11% as Kroger reviews warehouse strategy appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
SK Hynix to mass produce HBM4 chips as Nvidia demand fuels record gains
next post
Alibaba shares surge to highest since 2021 on AI, cloud push as analysts flag strong growth

Related Posts

Here’s why the BT Group share price is...

September 25, 2025

European gas markets on the edge ahead of...

November 13, 2024

Russia’s Gazprom secures triple-A rating from Chinese agency

September 8, 2025

Mullen Automotive stock has imploded: can MULN recover?

December 16, 2024

Samsung to cut thousands of jobs amid struggles...

October 2, 2024

Is the SPDR GLD ETF a buy as...

November 25, 2024

Asian markets open: Japan’s Nikkei falls 1.1%, Sensex...

July 1, 2025

New Covid XEC variant spreads across Europe and...

September 17, 2024

Chipotle says restaurants will give bigger servings after...

July 29, 2024

Global oil supply set to grow faster, with...

September 11, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Europe bulletin: Manchester synagogue attack aftermath, stocks close higher

      October 5, 2025
    • Evening digest: Trump sets deadline for Hamas, Canada’s slowdown, BTC rebounds

      October 5, 2025
    • Iran executes six people for alleged links to Israel, state media reports

      October 5, 2025
    • US digest: Trump’s Hamas ultimatum, government shutdown stalemate continues

      October 5, 2025
    • Japanese stocks may extend record run as Takaichi win revives ‘Abenomics’

      October 5, 2025

    Categories

    • Business (4,191)
    • Investing (2,958)
    • Latest News (2,080)
    • Politics (1,536)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved