Source: Sharecast
No financial details were disclosed but Ocado said the focus will be to quickly replace and upgrade Asda's existing ecommerce infrastructure, with Ocado's solutions to be rolled out across both stores and dark stores - warehouses - from 2027.
Ocado and Asda plan to deploy Ocado's end-to-end solutions across Asda ecommerce operations. These include Ocado's front-end (webshop), In-Store Fulfilment, and software to support last mile planning and route efficiency.
Ocado said the transaction is not expected to have a material financial impact in FY26.
Under the agreed framework, the two companies will work closely together in the coming months to enable go live in early 2027. Using Ocado's Smart Platform, Asda will be able to offer a full range of online services, including scheduled and short lead-time orders, as well as click & collect.
Asda will also use Ocado's platform to fulfil and deliver orders placed through aggregator platforms such as Uber Eats and Deliveroo.
Ocado 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.
"Through this partnership, Asda will be able to deploy a technology platform already processing more than 70 million orders annually worldwide, supporting market-leading customer propositions across 11 countries. Asda will also benefit from Ocado's significantly evolved platform, giving them the flexibility to adapt as the market continues to develop."
At 0930 BST, Ocado shares were up 13.3% at 235.80p.
Broker Peel Hunt, which reiterated its ‘buy’ rating on Ocado, said the deal with Asda "ticks a lot of boxes".
It said: "In our view, this will be taken extremely well by the market for multiple reasons: 1) it is a new deal after a long gap, showing that new clients still value Ocado’s tech after all the recent negative sentiment; 2) this deal is in the UK, which is a market that Ocado has not been able to expand in significantly before given its client Ocado.com; and 3) this deal includes Ocado’s solutions for click-and-collect, in-store fulfilment and aggregators like Uber Eats, Deliveroo and Just Eat, which are solutions that could be offered to others, including Kroger, over time too."
Peel Hunt has a 315p price target on the stock.
Russ Mould, investment director at AJ Bell, said the deal was "some much-needed good news" for Ocado.
"For Asda, this deal may give it some heft to take on Tesco and Sainsbury’s at a time when its position in the UK groceries market is looking fragile, while for Ocado it is a ray of light after a difficult period for the business," he said.
"It still feels a world away from the idea Ocado could become a global leader, licensing its platform to help supermarkets around the world set up their own web-based solutions, a story which really captured the imagination during the pandemic. Particularly given this deal follows a major setback with its big US partner Kroger last year.
"Despite a healthy bump today, the shares still sit more than 90% below the all-time highs achieved in 2020 when excitement around the stock and the potential for global growth hit fever pitch.
"Management at first blamed Covid restrictions for preventing it from meeting companies to agree contracts at the pace the market was hoping for. In the intervening period, the company has been plagued by operational issues, a patent dispute and surging costs.
"Long-standing shareholders will hope this is the first step in a less grandiose but still meaningful growth story."
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