Supermarket chain Asda has struck a deal with Ocado for the grocery technology company to take over all of Asda’s home deliveries starting in early 2027. The move is part of a broader effort to overhaul Asda’s struggling online shopping business.
Ocado will “quickly replace and upgrade” Asda’s existing e-commerce infrastructure, taking control of delivery operations from both stores and warehouses. The announcement sent Ocado’s shares up 13.3 percent in early trading to 236.5p, making it the top riser on the FTSE 250.
Shoppers will still be able to place click-and-collect orders. It will also use Ocado’s platform to fulfill deliveries made through third-party apps like Deliveroo, Just Eat and Uber Eats.
A deal that could change Ocado’s trajectory
Ocado shareholders are likely to welcome the news. The company has been trying to reverse its fortunes after a string of problems with its grocery-delivery technology upgrades. It has also been burned by problematic partnerships in the past.
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In November, US supermarket chain Kroger announced it would close three warehouses using Ocado’s equipment. Two months later, Ocado confirmed that Canadian chain Sobeys was also shutting down a facility. These stumbles weighed on investor confidence.
The business now expects to turn cash flow positive in the second half of 2026 — a notable shift for a company that has rarely turned a profit since it was founded 26 years ago.
During the covid lockdown, Ocado’s activity surged as online grocery shopping boomed, pushing its stock market value above £22 billion. But it failed to sustain that momentum. Its share price collapsed from over £27 to £2.08 before the Asda deal was announced.
Asda’s own challenges
Asda generated more than £21 billion in sales in 2025 and operates 1,100 stores nationwide. But the chain has been losing ground to German discounters Aldi and Lidl, which are increasingly attracting UK shoppers. Under private-equity owner TDR Capital and co-owner Mohsin Issa, it is searching for ways to revitalise its recent sales weakness.
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Allan Leighton, executive chairman of Asda, said the partnership will “strengthen our online offer and provide a consistent and high-quality experience for millions of shoppers, from order through to delivery.”
Ocado chief executive Tim Steiner said he was “delighted” with the deal. He noted that Asda will be able to “benefit from Ocado’s significantly evolved platform.”
Steiner added that the UK remains one of the world’s most competitive online grocery markets, where “technology, scale and continuous innovation are increasingly important for retailers looking to maintain leadership positions.”
What a skeptical observer might note
Still, Ocado’s history of troubled partnerships raises questions about execution. The Kroger and Sobeys closures weren’t isolated incidents — they reflected deeper challenges in making Ocado’s automated warehouses profitable at scale. The Asda deal gives the company another chance, but it doesn’t come with guarantees.
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Ocado’s share price had been beaten down so far that even a modest deal could produce a double-digit bounce. Whether the partnership translates into long-term profitability remains to be seen. The company has rarely made money in 26 years, and turning cash-flow positive by 2026 depends heavily on Asda’s ability to integrate Ocado’s system quickly and without major hiccups.
One slightly awkward detail: Asda’s current e-commerce setup is being replaced entirely, which means the transition could disrupt deliveries for a period. It will have to migrate millions of orders from the old system to its own platform, a process that has tripped up other retailers in the past.
For now, investors are betting that the deal gives Ocado a much-needed anchor client in its home market. Asda gets a proven — if imperfect — technology partner. The real test comes when the first Ocado vans roll out of Asda warehouses in early 2027.
