- Asda will use Ocado's technology platform for online grocery orders from 2027.
- The move comes as Asda works to reverse declining sales and market share.
- The deal expands Ocado's presence across Britain's biggest supermarket groups.
Asda has signed a deal to use Ocado's technology platform to power its online grocery operations, a move that could reshape the supermarket's digital business as it attempts to regain ground in an increasingly competitive market.
The Ocado-Asda partnership will see Britain's third-largest supermarket adopt Ocado's software for its grocery website, home deliveries, click-and-collect services and orders placed through delivery apps such as Uber Eats, Deliveroo and Just Eat. The new system is expected to go live in early 2027.
The agreement arrives at a challenging moment for Asda. The retailer has been losing market share since its 2021 takeover by TDR Capital and Mohsin Issa, while facing growing pressure from rivals including Aldi and Lidl. According to Kantar data, Asda's share of the UK grocery market has fallen from 14.3 per cent before the takeover to 11.5 per cent, leaving it only narrowly ahead of Aldi at 10.8 per cent.
A digital reset for Asda
Unlike some of Ocado's existing supermarket partnerships, the deal does not involve the use of Ocado's highly automated robotic warehouses. Instead, Asda will use the company's software and fulfilment technology to manage deliveries from stores and dedicated online fulfilment centres known as dark stores.
The partnership suggests Asda is focusing on improving the customer experience rather than making major investments in new warehouse infrastructure.
Online grocery shopping has become a key battleground for UK supermarkets, particularly as consumers increasingly expect faster delivery options and seamless app-based ordering. Asda appears to be betting that upgraded technology will help improve reliability, speed and convenience across its online channels.
The move also strengthens Ocado's position in the UK grocery sector. Once the system goes live, Ocado technology will support online grocery operations for three of Britain's largest supermarket groups. The company already powers much of Morrisons' online business and operates Ocado.com through its joint venture with Marks & Spencer.
A boost for Ocado after a difficult period
Investors appeared to welcome the announcement, with Ocado shares jumping sharply following news of the agreement.
The deal provides a positive development for a company that has faced questions over its long-term growth strategy. Ocado built its reputation around automated warehouse technology and international expansion, but several overseas partnerships have struggled in recent years.
In November, US supermarket giant Kroger announced plans to close three facilities using Ocado technology. Earlier this year, Canadian retailer Sobeys also moved to close one of its automated sites.
Against that backdrop, the Asda agreement may be viewed as a sign that retailers still see value in Ocado's technology, even without committing to its large-scale robotic warehouse model.
Asda's latest trading figures underline the scale of the challenge ahead. The retailer reported sales of £5 billion in the first quarter, down 1.5 per cent year-on-year. However, the decline was smaller than in previous months, suggesting trading conditions may be stabilising.
Allan Leighton, Asda's executive chairman, reportedly said the partnership would significantly improve the supermarket's online operations and strengthen its ability to compete in a fast-growing part of the grocery market.
For Ocado, the agreement offers a fresh commercial win. For Asda, the bigger test will be whether better technology can help reverse years of declining market share and bring more shoppers back to its online platform.
