Danni Hewson, head of financial analysis at AJ Bell, said: “It’s been a stinker of a day for Ocado shares, which have tumbled to their lowest level since 2013 after its US partner Kroger announced it was closing three warehouses currently powered by the British company’s tech.
“Ocado is seen by many as an undercover tech company and more of a ‘jam tomorrow’ deal, but one that has never quite managed to satisfy investors’ sweet tooth.
“Despite its huge potential the company has never quite lived up to expectations, and news that Kroger is cutting back on investment rather than scaling up is a significant setback.
“Ocado has put out a statement to try and mitigate the situation, saying Kroger will continue to use its systems in warehouses where high demand makes the sizeable outlay on its tech desirable, and that further deployment by Kroger is possible in future, along with other US opportunities.
“But investors will be looking at the bird in hand, and with technology becoming smarter, faster and potentially cheaper thanks to the power of AI, it could be Ocado is at risk of being left behind.”
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