Asda has agreed a deal with Ocado to use its technology for home deliveries from next year, giving the supermarket a new platform for online orders as it tries to repair recent sales weakness under its private equity owners. The arrangement will also bring Ocado software into Asda’s deliveries from stores and dark stores from early 2027.
The deal extends to orders placed through Uber Eats, Deliveroo and Just Eat, and to click and collect services through Asda’s website and apps. It does not use Ocado’s robot warehouses, which are central to the company’s warehouse-based delivery model and have become a major issue in its efforts to sell that system more widely.
Asda, owned by TDR Capital and Mohsin Issa, said the partnership will help it improve the shopping experience for millions of customers. Allan Leighton said the retailer knew continued success in a highly competitive market depended on providing a positive experience every time customers shop, and said partnering with Ocado would strengthen the online offer and provide a consistent, high-quality experience from order through to delivery while supporting the company’s formula for growth.
The deal matters now because Asda’s market position has continued to slip. Kantar data shows its UK grocery share has fallen to 11.5% from 14.3% before the 2021 takeover, leaving it just above Aldi on 10.8% as it tries to compete with discount rivals. For Asda, the move is another attempt to arrest that decline and make its online operation more useful in a market where delivery speed and convenience matter more than ever.
For Ocado, the agreement offers a fresh source of momentum after a long run of mixed results. The group, which runs Ocado.com in the UK in a joint venture with Marks & Spencer and once did deliveries for Waitrose, has rarely made a profit since it was founded 26 years ago. Its stock market value rose to more than £22bn during the coronavirus pandemic lockdowns, before its share price collapsed from more than £27 to £2.08 ahead of the Asda announcement.
Ocado shares rose 9% on Friday morning after the deal was announced, making the company the top riser on the FTSE 250. Tim Steiner said Ocado was delighted that Asda had chosen it to support the next phase of its online growth, adding that the UK remained one of the world’s most competitive and fast-evolving online grocery markets, where technology, scale and continuous innovation were increasingly important for retailers looking to maintain leadership positions.
The agreement also comes after a difficult stretch for Ocado’s international technology business. Kroger announced last November that it was closing three warehouses using Ocado’s equipment, and two months later Ocado revealed that Sobeys in Canada was closing its Calgary facility. Those setbacks underline the tension at the heart of the business: Ocado remains influential in grocery delivery technology, but its track record of turning that reach into lasting success has been uneven.
For Asda, the appeal is simpler. It wants a better online operation without relying on the most ambitious part of Ocado’s model. If the technology works as planned from next year and early 2027, Asda will have a sharper delivery system at the moment it needs one most.
