Ocado’s share price surged on news that it has signed a second international deal that will help its bid to become a major supplier of technology to the grocery industry.
Ocado will spend two years helping Sobeys, Canada’s second-largest food retailer, build a warehouse outside Toronto and will allow the chain to use its ecommerce, product picking and logistics technology to take and deliver orders.
Ocado expects the deal to have minimal impact on its earnings this year with an extra £15m in capital expenditure, but said profitability would grow in 2019 and beyond. It did not say how much it would make from the deal.
Shares in Ocado jumped by more than 13pc this morning.
The retailer is among the most shorted stocks in the UK, with around 13.5pc of its shares on loan to short sellers, who borrow shares and sell them in anticipation of the stock falling in price.
Sobeys chief executive Michael Medline said: “This unique and innovative Sobeys and Ocado experience will offer consumers the biggest selection, freshest products and most reliable delivery available anywhere on the planet.”
The deal is exclusive to Sobeys in Canada, and Ocado said there was scope to open more warehouses in the country’s “dense urban areas” in the future. It follows Ocado’s long-awaited tie-up with French grocer Groupe Casino in November.
Luke Jensen, who runs Ocado’s B2B business, said Sobeys would join its other customers Groupe Casino and Morrisons in “harnessing the best technology for grocery ecommerce”.