29th May 2026 08:52
(Alliance News) - Ocado Group PLC on Friday announced a deal to develop supermarket Asda Store Ltd's online business across the UK with the Ocado Smart Platform, providing a welcome bit of good news for Ocado after recent blows to its technology outsourcing business.
In response, shares in the Hatfield, Hertfordshire-based grocer and warehouse technology firm surged 14% to 236.41 pence each in London on Friday morning.
Leeds-based Asda is one of the UK's largest grocers, with total sales in 2025 of more than GBP21 billion, and operations across 1,100 stores nationwide. Asda's online grocery business fulfils more than 700,000 ecommerce orders weekly.
Ocado said the focus of the partnership will be to quickly replace and upgrade Asda's existing e-commerce infrastructure with Ocado's platform, with the aim to go live in early 2027.
Ocado and Asda plan to deploy Ocado's end-to-end solutions across Asda ecommerce operations, including Ocado's front-end, called 'webshop', in-store fulfilment, and software.
Ocado said the transaction is not expected to have a material financial impact in financial 2026, which ends November 29. It expects to turn cash flow positive during the second half of this financial year, with positive full year cash flow expected in financial 2027.
Chief Executive Tim Steiner said: "We're delighted that Asda has chosen Ocado to support the next phase of their online growth. The UK remains one of the world's most competitive and fast-evolving online grocery markets, where technology, scale and continuous innovation are increasingly important for retailers looking to maintain leadership positions."
The deal is a boost for Ocado after two partners recently announced they were closing some Ocado centres.
In January, Stellarton, Canada-based partner Sobeys Inc said it had decided to close one of its three Ocado-powered customer fulfilment centres.
Additionally, Kroger Co last year said it was closing three customer fulfilment centres in Frederick, Pleasant Prairie and Groveland. Frederick is in Maryland, Pleasant Prairie in Wisconsin and Groveland is in Florida. Ocado and Kroger had struck a deal back in 2018, when they had agreed to build the equivalent of 20 customer fulfilment centres, where automated robots sort orders.
In February, Ocado said it was cutting 1,000 jobs, scaling back research and development investment and simplifying its operating model.
By Jeremy Cutler, Alliance News reporter
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