Ocado back on track with Coles deal in Australia

Ocado on Tuesday bagged one of its largest international deals, allaying fears that a huge fire at its Andover warehouse last month would hold back growth.

The online retailer has signed its eighth partnership with another retailer, selling its robots and software to Australian grocer Coles.

Finance boss Duncan Tatton-Brown said: “The importance of this deal is that it’s just another deal. We were always confident we had no issues [with the technology]… but it’s not unhelpful that we’ve signed a deal after Andover.”

Ocado’s white-label shopping technology will help grow Coles’ online grocery business to compete with the likes of Amazon. Two warehouses will be built by the end of 2023 in Sydney and Melbourne. Coles trades from more than 2500 sites, including 818 supermarkets, and made A$39.4 billion (£21.3 billion) in annual sales last year, over A$1bn (£500,000) of which came from online.

The tie-up comes a month after Ocado unveiled a £1.5 billion retail joint venture with Marks & Spencer and its fifth major international deal in less than 18 months. M&S chairman Archie Norman is deputy chairman of Coles. Tatton-Brown said the deal with M&S means it has “more than adequate funding” to support the deals with the likes of Kroger in America, Casino in France and Sobeys in Canada.

Ocado said last week that the blaze at the Hampshire warehouse carved about 1.2% off sales in the quarter to March 3. Shares rose 6% to 1335p on Tuesday.