By James Davey and Raechel Thankam Job
LONDON, Could 29 (Reuters) – British grocery store group Asda has struck a partnership with know-how agency Ocado to overtake its on-line enterprise throughout the UK as it seeks to stem market share losses, the businesses mentioned on Friday.
The deal is a lift for Ocado after a serious setback final 12 months, when its North American companions – Kroger within the U.S. and Sobeys in Canada – closed some robotic buyer fulfilment centres, citing weaker-than-expected demand.
Ocado shares rose 12.3%, paring losses during the last 12 months to 10.3%.
Asda, majority owned by personal fairness agency TDR Capital, is Britain’s third-largest grocer however has been dropping floor to rivals together with business chief Tesco, quantity two Sainsbury’s and discounters Lidl and Aldi. Asda’s core revenue slumped 33% in 2025.
Asda trades from about 1,100 shops and already runs a sizeable on-line grocery enterprise, dealing with greater than 700,000 e-commerce orders every week. Its annual on-line gross sales of about £3 billion ($4 billion) equate to about 1.5% of the UK grocery market. Its complete share is 11.5%.
REPLACE AND UPGRADE
Beneath the deal, Asda will exchange and improve its current e-commerce infrastructure utilizing Ocado’s know-how, with options rolled out throughout shops and “darkish shops” – which fulfil on-line orders and aren’t open to the general public – from 2027.
“These options embody Ocado’s front-end (webshop), in-store fulfilment, and software program to help final mile planning and route effectivity,” Ocado mentioned.
The partnership will enable Asda to supply a full vary of on-line companies, together with scheduled and quick lead-time orders, in addition to click on and gather. Asda may even use Ocado’s platform to fulfil and ship orders positioned by way of aggregators akin to Uber Eats, Deliveroo and Simply Eat.
“Partnering with Ocado will strengthen our on-line supply,” Allan Leighton, Asda’s government chairman, mentioned.
Ocado CEO Tim Steiner advised Reuters he hoped the deal “was the beginning of a protracted journey collectively,” noting that sooner or later Asda may promote Ocado merchandise.
Ocado already has a UK partnership with Morrisons, the quantity six grocer, and a 50% stake in Ocado Retail, its on-line supply three way partnership with Marks & Spencer. M&S declined to remark.
Ocado mentioned the Asda deal shouldn’t be anticipated to have a cloth monetary influence in its 2025/26 12 months. It reiterated that it expects to show cash-flow optimistic within the second half of 2025/26 and for the complete 12 months in 2026/27.
JPMorgan analyst Marcus Diebel estimated the deal is value an annual 20 million kilos of incremental core earnings for Ocado from 2027.
