Better late than never: Ocado finally strikes overseas deal

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Ocado

An unnamed European retailer has struck a deal with Ocado to use its  full software platform, “know-how and support services” to help it establish  an online grocery business.

However, the mystery retailer will not use Ocado’s  automated warehouse technology and will instead have its own employees pick the products for delivery.

The agreement gives the  unidentified retailer the “right to request” the installation of Ocado’s automated mechanical handling equipment in centralised warehouses, on terms to be separately agreed.

The news comes after Ocado  missed its own deadline at the end of 2015 to find an international deal, with investors seeing this step as an important test of Ocado’s business model.

“This is an exciting step in the evolution of our business and in the delivery of our strategy,” Ocado chief executive Tim Steiner said.

READ MORE:  M&S and Ocado partnership on the horizon

“The benefits of our integrated solution are clear. As this particular retailer looks to develop its online offering the agreement we have signed provides the flexibility to expand its capacity efficiently in the future. We look forward to working closely with our new partner in the months and years ahead.

“Our discussions with other retailers across the globe are ongoing and we continue to expect to sign multiple deals in the medium term.”

Ocado will not  name the retailer it has partnered with  until it starts online deliveries to help “retain competitive advantage” over rivals.

However,  with little details of the  agreement revealed – including its  duration and the exact revenues it would generate – and the fact it is with a regional retailer, instead of a national one, the news of the partnership  could disappoint the City.

The new partnership is the third agreement Ocado has made in total, alongside existing but different arrangements with British  grocers Morrisons and Waitrose.

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