In January 2018, Ocado signed a partnership agreement with Sobeys Inc. (“Sobeys”) to launch an online grocery business in Canada, using the Ocado Smart Platform (“OSP”). Sobeys is the second largest food retailer in Canada generating C$24bn in sales revenue in 2017 from over 1,500 stores. It employs more than 125,000 people across its portfolio of banners including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, and Lawton’s Drug Stores.
The transformational agreement involves Sobeys building a distinct ecommerce department and will allow the firm to enter an entirely new online market - Toronto - where it has previously chosen not to offer customers an online service.
Michael Medline, President & CEO of Sobeys Inc., 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 will provide Sobey’s with an end-to-end solution including front-end website functionality, the construction of an automated CFC and a suite of last-mile routing technology. Sobeys will continue to fully control its commercial strategy, and its business and customer data. The partnership also grants Sobeys exclusive adoption of the Ocado Smart Platform in Canada, provided it meets pre-agreed growth targets.
Sobeys and Ocado will develop the first state-of-the-art CFC which shall serve the Greater Toronto area. The build and launch is expected to take about two years and both companies are assessing the case for building further CFCs to serve other large metropolitan areas across the country.