Sobeys partners with Ocado to develop an online grocery business in Canada
Canadian grocery business Sobeys has signed an agreement with Ocado in which it will partner with Ocado Solutions to develop an online grocery business in Canada using the Ocado Smart Platform.
Operating more than 1,500 stores across the country, Sobeys is Canada's second largest food retailer with sales of C$23.8 billion in 2107.
Ocado will partner exclusively in Canada with Sobeys to launch its end-to-end solution for online grocery services. This will include front-end web site functionality, construction of Ocado's latest generation, state-of-the-art automated warehouse, and last-mile routing management technology.
Sobeys and Ocado will develop their first customer fulfilment centre in the Greater Toronto Area with the build expected to take two years. The companies will also consider developing other CFCs in Canada's dense urban areas.
Michael Medline, president and chief executive of Sobeys, said:"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. 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 ecommerce 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."
Ocado expects the deal to create “significant long term value” to the business with the transaction being earnings neutral in the current financial year with the costs of establishing the partnership offsetting the initial fees payable.
Tim Steiner, chief executive of Ocado, 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."
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