Asda has agreed a deal to use Ocado's software for its online grocery operations and home deliveries from early 2027. The partnership will see Ocado's technology power Asda's website, deliveries from stores and 'dark stores', as well as orders placed via Uber Eats, Deliveroo, Just Eat, and click-and-collect services.
Ocado already provides similar technology for Marks & Spencer and Morrisons in the UK, as well as for international partners. The deal with Asda, Britain's third largest supermarket, does not involve Ocado's robot warehouses or sales through the Ocado.com website, but analysts suggest it could lead to a closer relationship in the future.
Shares in Ocado surged nearly 14% on the announcement, reflecting investor optimism. The company, which was founded 26 years ago and rarely turned a profit, has seen its stock fall from over £27 to £2.08 before the deal, partly due to setbacks with US partner Kroger and Canada's Sobeys closing Ocado-equipped facilities.
Asda hopes the partnership will reverse its recent sales decline. The supermarket's market share has dropped from 14.3% before its 2021 takeover by TDR Capital and Mohsin Issa to 11.5%, according to Kantar. First-quarter sales fell 1.5% to £5bn, though trading showed signs of improvement.
Allan Leighton, Asda's executive chair, said the new system would 'significantly improve our online business' and enable the company to compete more strongly. Ocado chief executive Tim Steiner added that the UK remains a highly competitive online grocery market where technology and innovation are crucial.
