Ocado has announced a partnership with ICA to develop its online grocery business in Sweden.
This is the third international partnership for the Ocado Smart Platform in six months.
The Swedish market leader will use Ocado's e-commerce platform and technology for its automated picking warehouses. ICA hopes this will improve its customer offering and boost efficiency.
ICA will invest SEK 600m (€56.6m) in the next four years in return for Ocado's expertise in developing online ordering applications and delivery technology, as well as constructing an automated warehouse. The first customer fulfilment centre (CFC) will be built in the Greater Stockholm area in 2021.
The partnership provides exclusivity in Sweden and the Baltic countries provided that ICA meets growth targets.
More centralised solution
Until now, ICA's online grocery offer has been picked in-store, with around 208 of its 1,300 stores offering an online grocery service. The partnership with Ocado represents a move to a more centralised solution, although Ocado will create separate mico-sites for each of the independent retailers, which can charge different prices.
Ocado's growing international presence
Ocado's role as a provider of retail technology is continuing to gain momentum. The ICA partnership is Ocado's third international deal in six months, following its partnership with Canadian food retailer Sobeys in January and its tie-up with French supermarket Groupe Casino late last year. The retailer also announced an agreement with an unnamed partner last June, making ICA its fourth international partner.
Ocado's shares rose seven per cent after the company forecasted that the ICA deal would create 'significant long term value'.
Luke Jensen, CEO of Ocado Solutions, said “We are excited and proud to be partnering with another of Europe’s leading grocery retailers. ICA has a strong track record of growth and innovation and our Smart Platform will give the ICA-retailers the opportunity to provide their customers with new levels of service, convenience and value. Our flexible, scalable modular solution is uniquely positioned to meet a fresh set of challenges and allow ICA to deliver its ambitions for online”
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