Asda is undertaking a significant technological overhaul of its online grocery and delivery services by partnering with Ocado, with the rollout expected to begin in early 2027. This collaboration aims to modernize Asda's website, improve fast-track deliveries, and enhance click-and-collect services. The deal specifically involves using Ocado's software for its grocery website and deliveries from stores and "dark stores," as well as for orders placed through third-party apps like Uber Eats, Deliveroo, and Just Eat.
This move comes amidst challenges for Asda, including widening losses that reportedly reached nearly $1 billion and a bungled $1 billion IT overhaul that derailed previous turnaround efforts. The supermarket's market share has been declining, with rival Aldi nearing to overtake it as Britain's third-largest supermarket. Chairman Allan Leighton, however, remains optimistic about the turnaround strategy, emphasizing that the partnership with Ocado will strengthen Asda's online offer and provide a consistent and high-quality experience for millions of shoppers.
The rationale behind this partnership for Asda is to acquire proven e-commerce capabilities without the extensive time and capital investment required for in-house development, especially given its substantial debt from a $6.8 billion takeover in early 2021. For shoppers, this is expected to translate into a slicker website and app with improved search, product recommendations, and a simpler checkout process. Behind the scenes, Ocado's technology will optimize in-store picking and delivery route planning, potentially leading to more available delivery slots and better on-time performance. Asda will maintain full control over pricing, product range, and the overall customer proposition, highlighting that this is a technology-led partnership rather than a full outsourcing.
