Ocado partner Sobeys, Canada’s second largest supermarket, has paused the launch of its new warehouse in Vancouver, which was originally planned for 2025, and the pair have agreed to “end terms related to their mutual exclusivity”.
The pair have worked with each other since inking the deal in 2018, with Ocado contracted to build warehouses for the grocer, and power its online operations through Ocado Smart Platform.
The online grocery giant tried to assuage concerns by highlighting that its partners in North America, Kroger in the US and Sobeys, had both reported strong growth in digital sales during their latest quarterly results.
It said: “Ocado and Sobeys have decided for now to focus their joint resources into driving order and sales volumes across the current network.”
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This comprises 3 customer fulfilment centres in Toronto, Montreal, and Calgary, and manual fulfilment solutions in nearly 100 stores. Ocado Group said it would keep the warehouse “under regular review”, with the site able to commission and scale quickly when required.
It insisted that its financial guidance for its current financial year remained unchanged, alongside its target to be cash flow positive in the mid-term.
The news follows Ocado’s relegation from the FTSE 100 earlier this month after its valuation fell from a £22bn high in the pandemic to £3.1bn. The North American retailer’s halting of expansion could also hinder any potential plan for the ecommerce business to switch to the New York Stock Exchange.
Last month, The Telegraph reported face-to-face discussions had been held with investors over recent weeks, where the idea of Ocado moving its listing to America was spoken about in detail.
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