Ocado has agreed to build a large robotic warehouse for an unnamed European retailer, a boost for the UK tech firm after Canadian grocer Sobeys and US chain Kroger moved to close some of their Ocado-operated facilities.
The retail technology company's shares jumped by as much as a 10th on Tuesday after agreeing the new deal.
It represented a timely boost, with Ocado's shares having plunged to a 13-year-low last week after a disappointing half-year update.
New European deal provides boost
Ocado told investors it has sealed an agreement to build a large customer fulfilment centre for a "fast-growing European national retailer".
It did not name the retailer but said the automated warehouse site is due to go live in the 2028 financial year. The facility will include new Ocado technology, including its robotic picking product and fully automated freezers.
Tim Steiner, chief executive of Ocado Group, said: "I'm delighted that Ocado's world-leading automation and robotics have been chosen to help drive forward the online operations of another leading retailer.
"Together with our agreement with Asda earlier this year, this partnership highlights the growing demand for our solutions across the breadth of our technology offering."
The deal is not expected to have a "material" impact on its financial results for the current financial year.
North American partners scale back
Sobeys is one of Canada's largest grocery chains, and its partnership with Ocado was seen as a key test of automated fulfilment in the Canadian market. Kroger's retreat similarly raises questions about the pace of automation adoption in the US grocery sector.
It comes after two major supermarket chains, Kroger in the US and Sobeys in Canada, said earlier this year that they were planning to shut a number of their robotic warehouses operated by Ocado amid weak consumer demand.
Last week, Ocado said it has held talks with potential new partners, including "live engagement" with potential partners in the US. The company is now in active discussions with potential new partners in the United States as it looks to rebuild its North American pipeline.