Ocado signs international deal with Swedish grocer ICA

ICA has around 1,300 stores across Sweden and holds a 36% market share via a franchised business model.

It represents the latest in series of partnerships for Ocado, which now runs the online businesses of Morrisons, French grocer Casino and Canadian supermarket Sobeys.

The partnership, which will function on Ocado’s Smart Platform, is expected to go live by the end of 2020.

The Smart Platform will include front-end website functionality, supported by Ocado’s ‘web shop’ and mobile ordering applications. ICA will also transfer its store-pick based operations to the Ocado Smart Platform.

Ocado Solutions chief executive Luke Jensen told Retail Week: “ICA already have an online business that is growing very rapidly but having spent time together they came to the conclusion Ocado would be able to help them deliver the best platform in the world, both in terms of the webshop and the automated facilities that we will help them build to fulfil orders at a lower cost and with a better quality of service.”

The partnership also comprises an Ocado-designed automated warehouse, in which Ocado will install internal infrastructure and robots, and last-mile routing management technology, which is designed to optimise delivery efficiency and result in good customer service and punctuality.

Ocado said today that it expected the deal with ICA to create “significant long-term value” for the business but added that the investment required to get the project underway would require “minimal capex” during this year but “additional capex in future years” as development of the warehouse, which will be located just outside of Stockholm, begins.

Jensen said that the appetite from international grocery players for technology partnerships with Ocado’s solutions arm had gathered speed in recent months.

”What we’re doing is highly relevant to virtually all the developed grocery markets in the world so we definitely see that building in terms of future transactions,” he said.

”It is difficult or perhaps impossible for traditional retailers to become world class technology companies. We have 1300 software developers working only on the latest for grocery – that is not something that even the biggest and best retailers are going to manage to do.

”It definitely creates an opportunity for us and is a win-win for our partners.”