Asda teams up with Ocado to revive ailing online sales
Asda is set to partner with grocery technology firm Ocado to revive its online offering as part of its turnaround efforts.
The partnership will see Asda replace its existing online delivery systems with Ocado’s technology platform across its stores and dark stores from 2027.
Asda will retain control of its online operations and fulfilment hubs, but use Ocado’s technology to upgrade its website and app, in-store picking and home delivery service.
It comes amid a major overhaul at Asda led by executive chairman Allan Leighton, to win back shoppers after a period of weak sales.
Leighton said: ‘We know that continued success in this highly competitive market is dependent on providing a positive experience for customers every time they shop.
‘Partnering with Ocado, will strengthen our online offer and provide a consistent and high-quality experience for millions of shoppers, from order through to delivery, while supporting our formula for growth.’
Returning Asda boss Allan Leighton has hailed progress at the supermarket but said there is ‘plenty to do’
Asda remains among the most popular supermarkets in Britain, behind Tesco and Sainsbury’s, but has haemorrhaged market share to discounters Aldi and Lidl in recent years.
It follows the takeover five years ago by private equity firm TDR and the billionaire Issa brothers.
Asda will be hoping that its new partnership with Ocado to improve its online infrastructure will close the chapter on a tumultuous period for the supermarket.
While the group has been in the throes of a major turnaround under returning boss Leighton, its efforts were thwarted by a botched £1billion IT upgrade last year.
The Leeds-based retailer said it faced ‘severe disruption’ linked to the IT transition, resulting in reduced product availability and weaker sales.
It had been separating more than 2,500 legacy IT systems and moving them to its own platforms since being sold by Walmart in 2021.
In March, Leighton hailed progress in Asda’s recovery efforts, but there was still ‘plenty to do’, as sales dropped by 3.3 per cent to £21billion last year. Profits tumbled by a third to £764million.
‘For Asda, this deal may give it some heft to take on Tesco and Sainsbury’s at a time when its position in the UK groceries market is looking fragile, while for Ocado it is a ray of light after a difficult period for the business,’ said Russ Mould, investment director at AJ Bell.
Ocado Group said the partnership will allow Asda to offer a ‘full range of online services,’ including through delivery firms such as Uber Eats, Deliveroo and Just Eat.
It follows Ocado’s partnerships with supermarkets, including its own retail arm and Morrisons.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Freetrade
Freetrade
Investing Isa now free on basic plan
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.