Ocado’s shares surged 13.3 per cent to 236.5p after the retail technology firm struck a major deal with supermarket giant Asda to overhaul its online shopping operations.
Asda’s home deliveries will be taken over by Ocado from early 2027, allowing the firm to “quickly replace and upgrade” Asda’s existing e-commerce structure across stores and warehouses.
The deal made Ocado the FTSE 250’s top riser on the day the agreement was announced, reflecting strong enthusiasm among the firm’s shareholders.
Shoppers will be able to purchase Asda products directly through Ocado’s web shop, as well as place click-and-collect orders through the platform.
Asda will also be able to use Ocado’s platform to fulfil orders placed through third-party apps, including Deliveroo, Just Eat and Uber Eats.
The deal represents a significant opportunity for Ocado to reverse its recent fortunes after enduring several blows to its efforts to upgrade grocery delivery technology.
US supermarket chain Kroger announced last November that it was closing three warehouses using Ocado’s equipment, dealing a notable setback to the firm’s International ambitions.
Two months after the Kroger announcement, Ocado confirmed that Canadian chain Sobeys was also closing one of its facilities, adding further pressure to the Business.
Ocado now anticipates turning cash flow positive in the second half of 2026, despite having rarely made a profit since it was founded 26 years ago.
The firm’s stock market value previously surged to more than £22bn during Covid lockdowns, which drove a boom in online shopping, but its share price subsequently collapsed from over 2700p to 208p before this deal was announced.
Asda, which generated more than £21bn in sales in 2025 and operates 1,100 stores nationwide, is looking to revitalise its performance under private equity owner TDR Capital and Mohsin Issa.
Allan Leighton, Executive Chairman of Asda, said: “We know that continued success in this highly competitive market is dependent on providing a positive experience for customers every time they shop.”
Leighton added: “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.”
The supermarket is also seeking to fend off growing competition from German discount rivals Aldi and Lidl, who are increasingly attracting UK shoppers away from traditional grocers.
Ocado chief executive Tim Steiner said he was “delighted” with the deal, adding that Asda would benefit from “Ocado’s significantly evolved platform” as the online grocery sector continues to develop rapidly.
Steiner said: “The UK remains 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.”