French grocery supermarket/hypermarket retailer Groupe Casino has signed a deal to use British online retailer Ocado’s e-commerce platform by developing the Ocado Smart Platform (OSP) in France. Also, Amazon signaled it would end AmazonFresh grocery delivery service in some US areas after November 30, while Amazon's Fresh and Prime services rolled out in the UK and Germany. AmazonFresh operates in more than a dozen cities from Los Angeles to Tokyo.
Amazon said AmazonFresh closures were unrelated to the Whole Foods deal, while sources blamed unreliable home delivery by the UPS service.
Reuters reported in November that AmazonFresh deliveries would stop for some customers in suburban Pennsylvania, New Jersey, New York, Maryland, and California.
AmazonFresh started over a decade ago but has yet to make a significant dent in the US$700 billion US grocery market. Whole Foods Market, which Amazon acquired in August for $13.7 billion, is expected to play a vital role in Amazon’s grocery delivery.
"Ocado is the world’s leading dedicated online grocery retailer with a strong technological advantage. The scalable, modular end-to-end solution provided by the OSP is a unique answer to the opportunities and challenges posed by shifting offline/online trends in grocery," Groupe Casino said.
"Groupe Casino’s banners will benefit from this innovative grocery e-commerce platform, first at Monoprix.fr, which will provide its customers with the largest assortment of food items at the best levels of services and costs."
The agreement sets out plans for the immediate initiation of the development of a Customer Fulfilment Centre to serve the Greater Paris area, the Normandie and Hauts de France Regions. The build and launch are expected to take at least two years.
Jean-Charles Naouri, CEO of Groupe Casino, said: "Groupe Casino is pleased to announce the agreement with Ocado Group which will allow it to develop an integrated customer and logistics platform, considered the best in the market.
“This agreement is a major leap in terms of quality: 50,000 food items will be offered in the first stage to customers in the Greater Paris area with precise and speedy delivery at home and through a platform which makes it achievable to do this profitably. Groupe Casino is very proud to have sealed this deal with Ocado which will further strengthen the quality of service available to its customers, at the core of its commitments for 120 years.”
Partnerships with international retailers are central to the growth prospects of Ocado, whose own branded online grocery service has a 1.3 percent market share in Britain.
“We continue to make investments to commercialize our proprietary platform and expect this deal to be one of many successful collaborations with leading retailers to use it the world over," said Luke Jensen CEO Ocado Solutions.
The online grocery market in France is focused on “Drive” or click and collect rather than direct home delivery, which accounts for 5 percent of online sales.
Analysts said Casino was betting on the online shopper in France adopting similar habits to Britain where online delivery vans are a common sight in towns and cities.
Ocado also has a partnership to deliver groceries for UK supermarket chain Morrison’s. Earlier in 2017, Ocado was reported to be considering a deal with Florida, US-based Publix Super Markets.
In 2017, Amazon captured an industry-leading 18 percent of online food and beverage sales in the US, double the 9 percent held by second-place Walmart in the e-tail grocery market, revealed market research firm Packaged Facts.