Rodney McMullen, chairman and chief executive of Kroger, said the partnership would allow it to "speed up our efforts to redefine the food and grocery customer experience".
Britain's online supermarket Ocado OCDO.L clinched a game-changing deal with Kroger KR.N as its exclusive partner in the USA, securing its entry into the world's biggest market and sending its shares up 50 percent.
It also said that Kroger, which recorded sales of US$122bn during 2017, making it the largest grocery retail chain in the U.S. in terms of revenue, was best placed to retain that market-leading position.
"Ocado's unique, proprietary and industry-leading technology is set to transform the shopping experience of consumers around the world", he commented.
Shares in Ocado are up by more than 250% over the last six months, as the company has finally delivered on expectations of an worldwide expansion. The deal follows on from one with Canadian grocery chain Sobeys in January.
Ocado's stock market surge pushed the value of the company above £5 billion ($6.8 billion) on Thursday.
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Ocado's Chief Financial Officer Duncan Tatton-Brown said the partnership was "transformational".
Other fund managers to have bet big on Ocado include Amit Lodha, manager of the £421 million Fidelity Global Focus fund, and Henry Boucher, who runs the £163 million Sarasin Food & Agriculture Opportunities fund. It's another blow, however, for the 7.2% who remain resolutely bearish, some of whom are surely rushing for the exit (buying to cover their short positions), contributing to the share price jump.
Ocado shares were trading nearly 80% higher on Thursday afternoon - reaching £10 per share at one stage.
Analysts said e-commerce giant Amazon's (AMZN.O) move into the grocery space with its takeover of Whole Foods was the likely catalyst.
Ocado said those will offset in part the total fees expected to be agreed between the two parties. 'Moreover, some of the nuances of this deal in particular give us a feeling that the tables have turned and Ocado now has the supplier power'.
Kroger and Ocado are already working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the U.S., and will identify up to a total of 20 over the first three years of the agreement.