Ocado in partner talks amid warehouse closures

Online supermarket Ocado has held talks with potential new partners in a bid to rebound following supermarket plans to close robotic warehouses.

The London-listed retail technology firm says it has had “live engagement” with potential US partners.

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.

It comes after two major supermarket chains – Kroger in the US and Sobeys in Canada – said they were planning to shut a number of robotic warehouses operated by Ocado amid weak consumer demand.

Ocado says one-off fees linked to the closure plans lifted revenues and earnings over the past half-year.

It added group revenues jumped 54 per cent 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 one per cent 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 lift by 15 per cent.

Tim Steiner, Ocado chief executive, 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 US a particular focus, supported by a significantly evolved portfolio of technology solutions.”

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