Asda has turned to Ocado Group in an attempt to rescue an online grocery operation that has lagged the competition for the best part of a decade, signing a long-term deal that will see the Hatfield-based technology firm rebuild the supermarket’s digital shop window, in-store picking and last-mile delivery network.
Under the agreement, announced this week, Asda will deploy Ocado’s Smart Platform, the same end-to-end fulfilment stack used by more than 1,000 grocery stores in 11 countries, across its consumer-facing website and app, its in-store order assembly, and the planning systems that route vans to roughly 1,100 UK stores. The roll-out is scheduled to begin in 2027 with a refreshed online shopping experience, before progressing to picking and delivery improvements.
The tie-up is the boldest move yet by executive chairman Allan Leighton, who returned to the Leeds-based grocer in late 2024 after a quarter of a century away, and is being positioned as a central plank of his turnaround plan. Leighton, who built his reputation in British retail during Asda’s Walmart-era heyday, has spent the past 18 months pumping money into price, availability and store standards while attempting to halt years of market-share slippage.
“We know that continued success in this highly competitive market is dependent on providing a positive experience for customers every time they shop,” Leighton said. “Partnering with Ocado will strengthen our online offer and provide a consistent and high-quality experience for millions of shoppers, from order through to delivery, while supporting our formula for growth.”
The decision reflects a hard commercial reality. According to Kantar Worldpanel, Asda’s share of the British grocery market has drifted below 14 per cent, leaving it firmly third behind Tesco and Sainsbury’s and within touching distance of Aldi. Online, where Tesco and Sainsbury’s have long dominated and Ocado Retail has set the benchmark for service, the gap has been even more pronounced. Industry analysts have repeatedly cited a clunky digital experience, limited delivery slots and inconsistent in-store picking as drags on Asda’s growth.
Why Ocado, and why now
For Ocado, the deal is a much-needed vote of confidence in a Solutions division that has had a turbulent few years, with US partner Kroger scaling back its commitments to robotic warehouses. Adding a top-five British grocer to the client roster is significant, not least because it suggests the company’s lower-cost in-store fulfilment software, rather than the capital-intensive automated warehouses that made its name, is becoming the commercial workhorse.
Tim Steiner, Ocado Group’s chief executive, said the UK remained “one of the world’s most competitive and fast-evolving online grocery markets, where technology, scale and continuous innovation are increasingly important for retailers looking to maintain leadership positions”. He added that the platform now processes more than 70 million orders annually worldwide.
For Asda, the rationale is equally clear. Building a modern e-commerce stack in-house would have taken years and tied up scarce capital at a moment when the business is already grappling with substantial debt inherited from the 2021 Issa brothers and TDR Capital buyout. Buying capability off the shelf from a proven specialist allows the supermarket to focus management attention on the basics, price, range and store experience, while pushing its online proposition forward in parallel. As Ocado has repeatedly argued, the structural shift to online grocery shopping since the pandemic has not unwound, and the cost of falling behind is rising.
What customers should expect
In practical terms, shoppers should notice a slicker website and app from 2027, with improved search, more relevant product recommendations and a simpler checkout. Behind the scenes, Ocado’s in-store fulfilment software is designed to help pickers work faster and more accurately, while route-planning tools should squeeze more deliveries out of each van, translating, Asda hopes, into more available slots, fewer substitutions and better on-time performance.
Asda has confirmed it will retain full control of pricing, range and the wider customer proposition. The partnership is technology-led rather than a wholesale outsourcing arrangement, closer in spirit to a software licence than to the deep Ocado Retail joint venture model the group operates with Marks & Spencer.
The move also dovetails with Asda’s longer-running pivot towards online shopping, which has already prompted significant operational changes inside the business and put pressure on parts of its store estate. Leighton’s bet is that a credible online proposition, married to renewed price competitiveness in-store, is the only viable route back to growth for a chain that built its reputation on value but has, by its own admission, drifted in recent years.
Whether Ocado’s technology can deliver that turnaround is a different question. Implementations of this scale rarely run to schedule, and the 2027 start date gives rivals plenty of time to widen their lead. But after years of incremental fixes, Leighton has finally placed a strategic bet — and tied Asda’s online future to one of the few British technology firms that genuinely operates at supermarket scale.
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Asda turns to Ocado in bid to fix its online grocery problem