Ocado signs deal with European retailer

Ocado signs deal with European retailer

British online food retailer Ocado has signed a deal with "a non-UK European retailer", a first for the online retailer that invested a lot of money to develop a highly innovative software platform and centralised warehouse system.

Online expertise

Ocado had previously signed a deal with British supermarket chain Morrissons, which gives the latter access to Ocado’s online expertise to help expand its own online operations. The company always stated it was working on additional contracts, with companies outside of the United Kingdom, and it has now seemingly done so.

 

It refuses to divulge who is its newest partner, but states that it is a regional European grocery retailer that currently does not have an online business and does not cater to several markets yet. The reason for the current secrecy is that the “retailer wishes to remain anonymous until it launches its online business in order to retain its competitive advantage”.

 

The agreement entails that the partner will pay an up-front fee to gain access to Ocado’s OSP and a continuous fee based on the volumes sold. It will not, for the time being, make use of Ocado’s automated mechanic handling equipment in centralised warehouses, but has the right to request that a later date, with terms to be discussed at that time.

 

Ocado’s CEO, Tim Steiner, is clearly pleased with this new deal: “We are delighted that our partner has decided to adopt OSP for its online operations. This is an exciting step in the evolution of our business and in the delivery of our strategy.” He also stated that there are still ongoing talks with other retailers and that new agreements will be signed “in the medium term”.