Ocado strikes deal with Canadian grocer

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BI Intelligence

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Ocado, a UK-based online grocer that specializes in technology, has partnered with Sobeys, a Canadian grocer that operates over 1,500 stores, according to Reuters. The deal will see Sobeys use Ocado’s e-commerce platform in order to offer online grocery orders.

Together, the two companies will develop a warehouse in Toronto that will use Ocado’s automated grocery processes, which include the use of robots. The pair will also potentially build additional centers in other urban areas. The Toronto warehouse is scheduled to open by April 2020, and the partnership between the two gives Sobeys exclusive access to Ocado’s system in the Canadian market for an undisclosed price.

Ocado’s automated warehouse technology and its software gives Sobeys the tools it needs to successfully enter online grocery.

  • Ocado’s UK warehouse features 1,000 robots that pick products and bring them to packers, allowing it to put orders together much faster. It’s also able to offer a wider selection of products, as the robots can easily locate the correct brands and cover ground faster than humans.
  • The software Ocado uses helps predict demand and identifies the fastest delivery routes available. This has enabled Ocado to order to match demand, leading it to waste only 1% of its inventory, when the industry average in the UK is 5%. It also helps delivery vehicles take the most accurate paths, allowing them to make deliveries in an hour. Avoiding wasted inventory and slow delivery times can save Sobeys money and lead to loyal customers as it ventures into online grocery.

Sobeys is Ocado’s second recent agreement with a foreign grocer, and it may continue to expand its partnerships. Ocado gave French supermarket group Casino exclusive rights to its technology in France in November 2017, so Ocado may be looking to find partners in various countries and markets. Given that the US’ online grocery industry is projected to skyrocket in value in the coming years, it may not be long before Ocado finds a partner in the country, despite would-be competitors like Amazon and Walmart.

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