Ocado eyes expansion across Europe, Asia & Australia

Ocado expansion

Ocado has said it was looking for opportunities to strike more deals with supermarket operators in Europe, Asia and Australia and move into other sectors.

Speaking at the Morgan Stanley Technology, Media and Telecoms conference in Barcelona yesterday, chief financial officer Duncan Tatton-Brown said the British online grocer was focusing on new territories in mainland Europe as well as markets such as Japan, South Korea and Australia.

“There’s some attractive opportunities on top of the ability to sell more capacity to existing clients,” he said.

“The sales teams are a reasonable size and they are reasonably busy.”

Tatton-Brown added that the company was ambitious about possibly taking its technology and services to other categories in retail and beyond, but it had to be careful.

“The way we have gone about that is we’ve effectively split up our teams, and of a team of call it 1200, 50 of them are now in a separate unit which is focused on future innovation,” he told Reuters.

“Future innovation includes: how do we use the technologies, the capabilities that we’ve developed, in other areas.

“There could well be other uses in grocery, other uses in retail and frankly could well be in sectors well away from retail.”

The news comes a few months after Ocado signed service and operational terms with Kroger, which will see it provide the technology for grocery deliveries in the US.

Under the terms of the agreement, Kroger – which trades from 2800 stores across the US and serves nine million customers per day – will order 20 fulfilment centres from Ocado during the first three years, the first three of which will be ordered by the end of this year.

As with recent deals with other retailers, Ocado will install and maintain modules of mechanical handling equipment sufficient to provide an agreed level of throughput.

The cost to Ocado for the first three centres is expected to be about £90 million, which the British firm said it had sufficient funds to cover.

Kroger’s customer fulfilment centres is slated to go live within around two years of each order being placed.

The size of the deal exceeded all of the warehouses it has built or plans to build with Morrison in the UK, Casino in France, Sobeys in Canada and the ICA Group in Sweden.

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