Kroger and Ocado select Monroe, Ohio for first fulfilment centre

Kroger Co has chosen its hometown of Cincinnati for the first of 20 high-tech warehouses it plans to build with online grocer Ocado Group Plc.

Kroger, the largest U.S. supermarket operator, is battling Walmart Inc and Amazon.com Inc for dominance in the small, but fast-growing online segment that accounts for anywhere from 1 percent to 4 percent of the $800 billion U.S. grocery market.

Kroger will spend $55 million to build the 335,000-square-foot "shed" in Monroe, Ohio, a suburb north of Cincinnati.

UK-based Ocado is the largest online grocery company and its "sheds" house hives of robots that pick and pack groceries. The technology in Ocado's facilities should help Kroger slash labour costs at a time when U.S. grocers are looking for ways to profitably delivery milk, eggs and other necessities to customer doorsteps.

Kroger said the project, which is expected to create 410 jobs, is subject to securing state and local incentives.