Shares in Ocado (LON:OCDO) jumped 10% on news the online grocery retailer had signed a partnership with Asda. With a network of around 1,100 stores and FY25 sales of over £21 billion, Asda is the UK’s third-biggest grocery seller.
2027 start date
Asda already operates a substantial online business, fulfilling more than 700,000 orders per week from its stores and warehouses. The deal will see Ocado roll out its software platform across these sites, replacing Asda’s current system, from 2027.
Asda will deploy Ocado’s software for its front end, in-store fulfilment, click and collect and last-mile delivery. It will also use the platform for orders placed through Deliveroo, Just Eat and Uber Eats.
The deal won’t have a material financial impact in FY26 as the system doesn’t go live until next year. Ocado already expects to be cash flow positive in H2 2026.
This is clearly good news for Ocado, and it looks like a smart move by Asda. The UK market is highly competitive and the discounters have made major gains at the expense of the incumbents.
The most recent Kantar grocery market share data shows Aldi and Lidl now account for 19.4% of spending. That’s up from 17.9% in December 2025 and marks a new high for the German-owned duo.
Some of those gains have come from Asda and Tesco (LON:TSCO), but by far the biggest chunk has come from Sainsburys (LON:SBRY). Its market share has fallen from 16.3% in December to just 15.2% this month.
In fairness, part of this is seasonal as Sainsburys tends to well over Christmas while the discounters lag. If we look at the change over one year, Tesco and Sainsbury are steady while Asda has lost the most ground. That would explain the decision to bring in Ocado to revamp its online business and try to claw back some market share.
Read the press release here:
https://www.ocadogroup.com/investors
