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Supermarket Coles becomes first Australian customer for Ocado

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Ocado has won its first Australian customer for the Ocado Smart Platform. 

The UK online grocer and technology company, a Top100 retailer in IRUK Top500 research, will work to enable supermarket chain Coles to serve customers in urban areas through robotic customer fulfilment centres (CFCs), and customers in less populated areas through pick-from store software.

Coles is one of Australia’s largest retailers, with more than 2,500 outlets, including 818 supermarkets, 911 liquor stores and 712 Coles Express petrol stations. The retailer has been trading in Australia for more than a century and turns over about A$40bn (£21.5bn a year. In November 2018, it was demerged from the Wesfarmers group that previously owned Homebase.  Its ecommerce business, Coles Online, already turns over more than A$1bn (£538m) a year and has more than 1,000 click and collect locations across the Coles network. 

The new partnership will start with two CFCs, in Sydney and Melbourne, that are expected to go live within four years. The pick-from-store programme will go live at about the same time. 

Steven Cain, chief executive of Coles Group, 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, chief executive 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. Coles is a grocer with a global reputation for innovation and outstanding commitment to their customers, and I am delighted we will be working together in the years to come to reshape the food retail landscape in Australia.”

Ocado said the partnership would incur most of its capital expenditure in the 18 months leading up to the fulfilment centres opening, and that income from the deal would start to feature on the Ocado balance sheet once operations start. 

Luke Jensen, CEO of Ocado Solutions, said: ”We are delighted to partner with Coles. Already a leading player in online grocery retailing in Australia, we are proud that they have chosen the Ocado Smart Platform to take them to the next level. Our flexible, scalable and modular solution will help them bring new levels of convenience, choice and value to Australian consumers. The Australian market is changing as consumer needs evolve and our platform will enable Coles to lead this transformation in a profitable and sustainable way.”

Coles follows retailers including the US’ Kroger and France’s Groupe Casino in becoming a customer for the Ocado Smart Platform. It has also agreed to sell half of its UK business to a joint venture that it will run in partnership with Marks & Spencer. This appears to signal a change of emphasis in the business as it transitions from being an online grocer that develops its technology in-house to a technology company with a stake in its own online grocery business.

Image courtesy of Ocado

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