Technology

Ocado, Sobeys to Develop Online Grocery Platform

Deal marks first North American partnership for U.K.-based technology provider

Ocado, the U.K.-based online grocer long rumored to expand in the U.S., is coming first to Canada.

The company will bring its online grocery ordering, automated fulfillment and home delivery solution to Sobeys, the companies announced Monday.

Nova Scotia-based Sobeys described Ocado as “the world’s most innovative online grocery platform.” Its plans include implementation of Ocado’s end-to-end grocery e-commerce “Smart Platform," which includes: a front-end web site; last-mile route management technology to optimize efficient delivery; and construction of a state of the art fulfillment center built specifically for e-commerce.

The latter facility will be built near Toronto and is expected to open in about two years, according to Sobeys and Ocado, which said they would consider developing other CFCs in Canada’s urban areas.

“Sobeys intends to play to win in Canadian online grocery shopping. We are very excited to bring this best-in-the-world grocery e-commerce experience to Canadian customers,” Michael Medline, president and CEO of Sobeys, said in a statement. “This unique and innovative Sobeys and Ocado experience will offer consumers the biggest selection, freshest products and most reliable delivery available anywhere on the planet. Our end-to-end e-commerce solution will allow Sobeys to build an online offer in a manner that is profitable and creates exceptional value for our customers, investors and supplier partners.”

Publicly traded Ocado is noted for having profitably implemented online shopping capabilities in Europe as a standalone business and as a the online commerce operator for Wm Morrison Supermarkets in the UK, and Gruppe Casiono in France. Ocado officials have long discussed a desire to expand in North Ameroica, with speculation it could take over online grocery for companies such as Publix.

 “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,” Tim Steiner, CEO of Ocado Group, said.

Luke Jensen, CEO of Ocado Solutions, added “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. We are pleased to be partnering with innovative and forward-looking retailers such as Sobeys. Soon, four of the world’s most ambitious grocery retailers online – Ocado, Morrisons, Groupe Casino, and Sobeys – will be powered by the Ocado Smart Platform and we look forward to welcoming more to this list going forward.”

Sobeys owns, affliates of franchises around 1,500 stores in 10 Canadian provinces under the Sobeys, Safeway, IGA, Foodland, FreshCo, Thifty and Lawton’s Drug banner.

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