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It's a real showdown. 

Elisabeth Sherman
June 22, 2018

Just when you thought that Amazon had achieved complete dominance in the online delivery world, another grocery store stepped in and said not so fast. Last month, Kroger partnered with U.K. supermarket giant Ocado, and now the brick-and-mortar chain is leading grocery delivery sales.

According to an in-depth report from the Wall Street Journal, the partnership with Ocado includes building 20 new warehouses over the next three years, which will make it easier for Kroger to not only fulfill online delivery orders, but also online orders which customers can then pick up in stores. The new warehouses come at a price though: In total, Kroger will spend $400 million building them.

At those warehouses, robots sort through stacks and stacks of boxes to reveal the correct grocery items for customers, which human workers then gather for each order. Apparently, part of the deal with Kroger stipulated that Ocado could not share the secret to that technology with any other U.S. retailers.

Still, Amazon and Walmart, which are currently locked in a battle for grocery store dominance, are likely to retaliate with new technology of their own. In the meantime, Amazon is rolling out perks for Prime members, including discounts at Whole Foods across the United States and free two-hour delivery. As of March of this year, Walmart  delivers groceries in 100 cities across the United States, with more plans to expand.

Still, most people have yet to catch on to the online grocery shopping trend: As the Journal reports, just two percent of Americans buy their groceries online, and most of those products aren’t produce, but rather those with a longer shelf life, like bottled water.

Amazon is still a force to be reckoned with, though—which makes it super impressive that Kroger found a way to beat the company at its own game.