Business World

Friday 27 April 2018

Ocado announces partnership with Canada's second largest food retailer

Ocado sales
Ocado sales
Ellie Donnelly

Ellie Donnelly

British online grocery Ocado has confirmed that it will partner with Canada's Sobeys to develop an online grocery business.

Sobeys is Canada's second largest food retailer, operating more than 1,500 stores across the country, and generating sales of C$23.8bn (€15.6bn) in its financial year 2017.

The partnership will involve the construction of Ocado's latest generation automated warehouse designed specifically for grocery e-commerce, as well as Ocado's proprietary 'web shop' and mobile grocery ordering applications.

"Sobeys is a highly successful and much admired Canadian business and we are proud that they have chosen Ocado Solutions to partner with to build their online grocery business," Tim Steiner, chief executive of Ocado, said.

Sobeys and Ocado will develop their first Customer Fulfilment Centre ("CFC") in Toronto, in a build that is expected to take two years.

In addition to this initial CFC, Sobeys and Ocado will consider developing other CFCs in Canada's dense urban areas.

In consideration of the investments made by Ocado, including maintenance and access to technology, Sobeys will pay Ocado certain upfront fees upon signing and during the development phase, then ongoing fees linked to installed capacity within the CFC and service criteria.

"This unique and innovative Sobeys and Ocado experience will offer consumers the biggest selection, freshest products and most reliable delivery available anywhere on the planet," Michael Medline, president and chief executive of Sobeys, said.

"Our end-to-end e-commerce solution will allow Sobeys to build an online offer in a manner that is profitable and creates exceptional value for our customers, investors and supplier partners," Mr Medline continued.

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