Ocado seeks new North American partners after Sobeys and Kroger warehouse closures
The British retail technology firm is re-engaging retailers in the United States and Canada after two major grocery chains pulled back from its robotic warehouse model.
Ocado is talking with potential new partners in the United States and Canada after two major supermarket chains, Sobeys in Canada and Kroger in the U.S., moved to shut robotic warehouses run by the British technology firm.
The London-listed retail technology firm said it has had "live engagement" with potential partners in the US.
The end of a number of exclusivity agreements has allowed the group to increase activity in a number of regions, with the group also highlighting "multiple new grocery prospects" in North America, Europe and its Asia Pacific region.
The closure of Sobeys' Canadian warehouses underscores the challenges of automated grocery fulfillment in this market.
U.S. partner Kroger's similar pullback raises questions about the viability of Ocado's technology in North America.
Canadian grocers are watching closely as they assess their own automation strategies.
It comes after two major supermarket chains, Kroger in the US and Sobeys in Canada, said they were planning to shut a number of their robotic warehouses operated by Ocado amid weak consumer demand.
On Thursday, Ocado revealed that one-off fees linked to the closure plans lifted revenues and earnings over the past half-year.
It revealed that group revenues jumped by 54% to £1.04 billion for the six months to May 31, compared with a year earlier.
This was heavily linked to £354 million in fees and other revenues connected to the proposed closures.
Revenues were only 1% higher after stripping out the one-off impact of the closures.
Meanwhile, earnings before tax lifted to £17 million, compared with a £173 million loss a year earlier.
The group's UK joint venture with Marks & Spencer, Ocado Retail, saw revenues lifted by 15% and posted stronger earnings for the period.
Tim Steiner, chief executive of Ocado, said: "The first half of the year has seen accelerating international volume growth, strong commercial momentum, improved organisational efficiency, and rigorous cost discipline.
"Since the start of the year, we've been re-engaging retailers across some of the world's largest grocery markets, with the USA a particular focus, supported by a significantly evolved portfolio of technology solutions."
The update comes a week after Mr Steiner said he will stay on at the helm of the group until December next year, but confirmed succession plans after months of speculation.
The group said it would look to finalise the plans at the start of its 2027-28 financial year, which begins on December 1 2027.
It came after reports of unrest with Ocado chair Adam Warby, and the Tetra Pak billionaire Jorn Rausing, a shareholder and board member.
Shares in the company were down 15% on Thursday morning.