Asda has signed a major partnership with Ocado to modernise and expand its online grocery business across the UK as it seeks to reverse recent market share declines.
The agreement represents a significant win for Ocado, whose technology business faced challenges last year after partners Kroger in the United States and Sobeys in Canada scaled back parts of their automated fulfilment networks due to weaker-than-expected demand.
Following the announcement, Ocado shares rose more than 12%, helping recover some of the stock’s recent losses.
Asda, majority-owned by TDR Capital, is the UK’s third-largest supermarket group but has been losing market share to rivals including Tesco, Sainsbury’s, as well as discount retailers Lidl and Aldi.
The retailer currently operates around 1,100 stores and processes more than 700,000 online grocery orders each week. Annual online sales are estimated at approximately £3 billion, representing around 1.5% of the UK grocery market, while Asda’s overall grocery market share stands at roughly 11.5%.
Under the new partnership, Asda will replace and upgrade its existing e-commerce infrastructure using Ocado’s technology platform. The rollout will extend across stores and dedicated “dark stores” — fulfilment centres used exclusively for online orders — beginning from 2027.
The investment is expected to improve online order efficiency, automation capabilities and customer service while strengthening Asda’s ability to compete in the rapidly evolving UK grocery delivery market.