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Ocado automated DC tech wins deal with Australian retail giant, Waitrose MD plays down end of deal impact


Ocado’s technology arm has won a new deal from Australian retailer Coles in a vote of confidence for its automated distribution centre technology, as Waitrose separately played down the impact of its deal with Ocado ending.
The deal will see the partners building two new customer fulfilment centres in Sydney and Melbourne, expected to go live within four years.

Ocado will provide both technology solutions and support to the retailer, which currently has around A$1 billion in online sales per year. Coles will also look to move its store picking operations to the Ocado Smart Platform.

Ocado’s share price has risen around 5% since the news was announced on 26 March.

Steven Cain, CEO of Coles Group Ltd, said: “Ocado is singularly focused on online grocery shopping and, as a result, has become the best in the world. We are delighted to be partnering with them to make life easier for Coles’ customers here in Australia. Ocado’s ongoing investment and retail partnerships around the world will help us continue to improve our offer into the future.”

Tim Steiner, CEO of Ocado, said: “Today marks another big moment in the continuing transformation of Ocado. Our unique, proprietary and industry-leading technology is bringing new growth opportunities to retailers around the world and changing the customer experience of grocery shopping.”

As well as using the proprietary Ocado Smart Platform in its own UK delivery service, the company has deals with Casino in France and Kroger in the US. The grocer has recently seen its revenues impacted by a fire at its warehouse.

The company has also recently declined to renew its deal to sell Waitrose products in favour of one with M&S. At Retail Week Live today (27 March), Waitrose MD Rob Collins dodged a question on whether this would impact revenues.

“The relationship we had with Ocado was a commercial one. What we had very consciously been doing is strengthening, investing 20 percent of discretionary capital in it. Last year it accounted for 5% of sales and we grew four times as fast as the market.

“What’s most important to me is customers who really value what Waitrose offers have convenient accessible ways, going forward there is only one place where people will be able to buy Waitrose goods.”

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