Following its recent agreement with French supermarket Group Casino, the UK's Ocado Group plc (Ocado) and Sobeys Inc. (Sobeys) have signed an international partnership to develop an online grocery business in Canada using the Ocado Smart Platform (OSP), that should help the growth prospects of Ocado's proprietary technology in North America.
Sobeys is Canada's second largest food retailer (after Loblaws) and operates more than 1,500 stores across the country, generating sales of C$23.8 billion in fiscal 2017.
"With more than 15 years at the forefront of innovation and success in grocery ecommerce, Ocado will partner exclusively in Canada with Sobeys to launch their end-to-end solution for online grocery services," Ocado plc said in a statement.
"This will include best-in-class front-end web site functionality, supported by Ocado's proprietary 'web shop' and mobile grocery ordering applications; construction of Ocado's latest generation, state-of-the-art automated warehouse designed specifically for grocery ecommerce (in which Ocado will invest to install its grid and robots); and last-mile routing management technology to optimize delivery truck efficiency, customer service excellence and punctuality."
Sobeys and Ocado will develop their first Customer Fulfilment Centre (CFC) in the Greater Toronto Area. The build is expected to take approximately two years. In addition to this initial CFC, Sobeys and Ocado will consider developing other CFCs in Canada's dense urban areas.
Ocado will provide a comprehensive and customized suite of support and engineering services to enable a smooth launch and sustainable ecommerce operations. Sobeys and Ocado will also partner to incorporate ongoing learning and innovation from Ocado's global experience into the Canadian business.
"Sobeys intends to play to win in Canadian online grocery shopping. We are very excited to bring this best-in-the-world grocery ecommerce experience to Canadian customers," said Michael Medline, president and CEO of Sobeys Inc.
Tim Steiner, CEO of Ocado Group, said: "We are delighted to be working with one of the leaders in North American grocery retailing. Sobeys is a highly successful and much admired Canadian business and we are proud that they have chosen Ocado Solutions to partner with to build their online grocery business".
"Channel shift to online in North America is gaining pace as consumers increasingly seek the benefits of grocery shopping from the comforts of their own homes, and as retailers attempt to offer services to meet this growing customer trend," Luke Jensen, CEO of Ocado Solutions added.
"We are pleased to be partnering with innovative and forward-looking retailers such as Sobeys. Soon Sobeys, along with Ocado, Morrisons and Groupe Casino will be powered by Ocado Smart Platform, sharing a common goal of harnessing the best technology for grocery ecommerce to win in their markets. We look forward to welcoming more major grocers to this list going forward."
Kantar Worldpanel said it was likely to be a record December for UK grocery e-commerce. "Internet specialist Ocado grew ahead of the online market during the latest quarter. Sales were up by 5.2 per cent as market share remained flat year-on-year at 1.3 percent," it said.