Asda, the UK's third-largest supermarket, has struck a deal to use Ocado's technology for its online grocery operations from early 2027. The agreement will see Ocado's software power Asda's grocery website, home deliveries, and services via third-party apps such as Uber Eats, Deliveroo, and Just Eat, as well as click-and-collect services.
The partnership means Ocado will soon provide technology for three of the UK's biggest grocers, including its existing joint venture with Marks & Spencer and its support for Morrisons. However, Asda will not use Ocado's robot warehouses or sell through the Ocado.com website. Instead, the focus is on modernising Asda's online platform and improving fast-track deliveries and click-and-collect.
Ocado's shares rose nearly 14% on Friday following the announcement, as analysts suggested the deal could be a first step toward a closer relationship. Asda, owned by TDR Capital and Mohsin Issa, hopes the partnership will reverse recent sales declines and help it compete with discounters Aldi and Lidl. Asda's market share has fallen from 14.3% before its 2021 takeover to 11.5%, according to Kantar data.
Asda reported a 1.5% drop in sales to £5bn in the first quarter of this year, though adjusted figures showed an improvement compared with a 4.2% decline in the previous quarter. Executive chair Allan Leighton said the partnership with Ocado would “significantly improve our online business” and enable Asda to “compete more strongly in this fast-growing channel.”
Ocado CEO Tim Steiner said the deal reflects the UK's competitive online grocery market, where “technology, scale and continuous innovation are increasingly important.” Ocado has faced challenges with some international partnerships, including closures of facilities in the US and Canada, but remains a key player in grocery technology.
