Supermarket giant Asda has agreed a landmark deal with grocery technology firm Ocado, under which the latter will take over all home deliveries from next year, as the supermarket seeks to completely transform its online shopping operation.
Ocado to Upgrade Asda's E-commerce Infrastructure
Ocado will quickly replace and upgrade Asda's existing e-commerce infrastructure, assuming control of the supermarket's delivery operations from stores and warehouses from early 2027. Ocado's shares soared 13.3 per cent in early trading to 236.5p, propelling it to the top of the FTSE 250 risers board, as reported by City AM.
New Services for Customers
Customers will be able to place click-and-collect orders, while Asda will also be able to utilise the platform to fulfil orders placed through third-party apps, including Deliveroo, Just Eat and Uber Eats. Ocado shareholders are expected to greet the news warmly, as the company seeks to turn around its fortunes following a string of setbacks in its efforts to modernise grocery delivery technology.
Ocado's Recent Challenges
The firm has also been dogged by troubled partnerships, with US supermarket chain Kroger announcing the closure of three warehouses operating Ocado's equipment last November. Just two months later, Ocado confirmed that Canadian retailer Sobeys was similarly shutting down one of its facilities. The business now expects to turn cash flow positive in the second half of 2026, despite having rarely posted a profit since its founding 26 years ago.
Historical Context
The group experienced a significant boost during the Covid lockdowns, which triggered a surge in online shopping and drove its stock market valuation to over £22bn. However, the company struggled to maintain this trajectory, with its share price plummeting from over £27 to £2.08 before the Asda agreement was revealed.
Asda's Strategy to Compete
Allan Leighton, executive chairman at Asda, said: "We know that continued success in this highly competitive market is dependent on providing a positive experience for customers every time they shop. Partnering with Ocado will strengthen our online offer and provide a consistent and high-quality experience for millions of shoppers, from order through to delivery."
Asda recorded more than £21bn in sales in 2025, operating 1,100 stores across the country, but is seeking to address recent underperformance under private equity owner TDR Capital and Moshin Issa. The supermarket giant is exploring opportunities to fend off German discount rivals Aldi and Lidl, who continue to win over growing numbers of British consumers.
Ocado CEO's Statement
Ocado chief executive Tim Steiner also said he was "delighted" with the deal, highlighting that Asda will be able to "benefit from Ocado's significantly evolved platform." He said: "The UK remains one of the world's most competitive and fast-evolving online grocery markets, where technology, scale and continuous innovation are increasingly important for retailers looking to maintain leadership positions."
To find all the planning applications, traffic diversions, road layout changes, alcohol licence applications and more in your community, visit the Public Notices Portal.
