Morrisons expands use of Ocado’s grocery-picking software in store
Ocado has announced it will work more with Morrisons in-store and less via fulfilment centres as the latter company recalibrates the operations of its online grocery arm. Morrisons, which has been working with Ocado since 2013, will “gradually cease” deliveries from Ocado’s Erith fulfilment centre, in the south east Ocado said in a statement this [...]
Morrisons, which has been working with Ocado since 2013, will “gradually cease” deliveries from Ocado’s Erith fulfilment centre, in the south east Ocado said in a statement this morning.
Instead, it will build further volumes from Ocado’s fulfilment centre in the Midlands, as well as expanding its store network where online orders are fulfilled using Ocado’s AI-powered in-store tech.
“In-store fulfilment… gives our customers full access to our unique Market Street offer. Morrisons.com will continue to service every postcode in England, Wales and Scotland, with no impact to customers,” Baitiéh said.
Tim Steiner, CEO of Ocado, said: “With our world-leading technology, Ocado Retail and Morrisons offer amazing propositions in the UK online grocery market.
“As Morrisons reduce their operations at Erith and build their volumes in other parts of the network we are working with them to ensure seamless continuity of service to their customers and to continue strong market share growth across the UK market with the Ocado Smart Platform.”
Steiner added that reduced pressure on the Erith fulfilment centre will allow the online shopping arm of the tech business to grow.
“As Ocado Retail moves towards full utilisation of existing capacity, this decision enables a helpful option to provide it with further short-term growth, without an expectation for additional capex,” he said.
Ocado has been heavily investing tech but its grocery arm has struggled since the pandemic – at its 2021 peak, the online grocer had a market cap of £22bn. It is now worth around £3bn.
Earlier this year, leading broker Bernstein changed its rating from ‘outperform’ to ‘underperform’ and cut its price target from 1,000p to 250p, “having been one of the last bulls standing.”
However, sales have been growing recently as demand picks back up, in part due to a new joint venture with M&S.
