Ocado’s platform is already used in more than 1,000 grocery stores globally, processing over 70 million orders annually across 11 countries.

The transaction is not expected to have a material financial impact in fiscal year 2026; Ocado aims to be cash flow positive in the second half of the year and full-year cash flow positive in 2027.

The rollout of Ocado’s smart platform is planned to begin in 2027, starting with the online shopping experience for Asda customers.

Ocado has struggled with profitability, and the deal led to a roughly 9% rise in Ocado’s shares on the news.

Ocado’s involvement centers on software and technology; it does not include its robot-powered warehouses in this deal.

Asda will partner with Ocado to upgrade its online grocery service across the website, app, in-store picking, and home delivery, leveraging Ocado’s software and technology.

RBC Capital Markets viewed Ocado as underperform with a 175p target, noting potential upsides for Asda’s ecommerce but possible negatives for Tesco and Sainsbury’s, with limited impact for Marks & Spencer.

The partnership strengthens Asda’s online offering amid sales weakness under owners TDR Capital and Mohsin Issa, as it competes with Aldi and Lidl; Asda’s UK market share has fallen from 14.3% in 2021 to 11.5%.

Allan Leighton, Asda’s Executive Chairman, called the collaboration essential to competing effectively in online grocery.

The move is part of Asda’s turnaround plan led by Allan Leighton to improve product availability and value for shoppers.

Leighton states the partnership will strengthen Asda’s ability to deliver a consistent, high-quality shopping experience for millions of customers.

Before the announcement, Ocado traded at about 1.5 times CY26 estimated EV/Sales, a multiple RBC described as on the fuller side given midterm target risks for Technology Solutions.