Asda, the UK's third-largest supermarket, has announced a deal to use Ocado's technology for its online grocery operations from early 2027. The partnership will see Ocado's software support Asda's website, home deliveries, and services from its stores and 'dark stores', which are smaller warehouses not open to the public.
The agreement also covers deliveries ordered through third-party apps such as Uber Eats, Deliveroo, and Just Eat, as well as click-and-collect services. Asda will not use Ocado's robotic warehouses or sell through the Ocado.com website.
This deal makes Ocado the technology provider for three of the UK's largest grocers, including Marks & Spencer (via Ocado.com) and Morrisons. Asda hopes the partnership will help reverse recent sales declines and compete more effectively against discounters Aldi and Lidl, which do not offer online grocery sales.
Asda's UK grocery market share has fallen from 14.3% before its 2021 takeover to 11.5%, according to Kantar data. The supermarket reported a 1.5% drop in sales to £5bn in the first quarter of 2024, though trading showed signs of improvement.
Allan Leighton, Asda's executive chair, said the partnership would 'significantly improve our online business' and enable the company to 'compete more strongly in this fast-growing channel'. Ocado CEO Tim Steiner expressed delight that Asda had chosen Ocado to support its online growth.
Ocado shares rose nearly 14% on the announcement, as analysts suggested the software-based deal could lead to a closer relationship involving robotic warehouses in the future.
