Ocado inks partnership deal with Sobeys
After bagging a deal with France’s Groupe Casino late last year, Ocado has announced another international partnership, linking up with Sobeys. The second largest food retailer in Canada, operating more than 1,500 stores across the country, it will team with Ocado Solutions to develop an online grocery business. This will include front-end web site functionality, supported by the latter’s proprietary 'web shop' and mobile grocery ordering applications; construction of its latest generation automated warehouse (in which Ocado will invest to install its grid and robots); and last-mile routing management technology.
The two will develop their first Customer Fulfilment Centre (CFC) in the Greater Toronto area, with the build set to take approximately two years. They will also consider developing other CFCs in Canada's dense urban areas. Ocado says the deal will yield "significant long-term value to the business", with earnings neutral in the current financial year with the costs of establishing the partnership offsetting the initial fees payable. It then expects capital expenditure of £15 million in the 2018 financial year to support the development of its Smart Platform.
Luke Jensen, CEO at Ocado Solutions, comments: "Channel shift to online in North America is gaining pace as consumers increasingly seek the benefits of grocery shopping from the comforts of their own homes, and as retailers attempt to offer services to meet this growing customer trend. We are pleased to be partnering with innovative and forward-looking retailers such as Sobeys. Soon Sobeys, along with Ocado, Morrisons and Groupe Casino, will be powered by Smart Platform, sharing a common goal of harnessing the best technology for grocery e-commerce to win in their markets. We look forward to welcoming more major grocers to this list going forward."