Ocado’s Solutions model validated by online grocery demand in COVID-19

Following the news that Ocado has launched its first fulfilment centre in North America with Canadian supermarket Sobeys, Thomas Brereton, Retail Analyst at GlobalData, a leading data and analytics company, offers his view on the situation:

“As COVID-19 continues to raise demand for home delivery from food retailers, the opening of one of Ocado’s automation-heavy customer fulfilment centres (CFC) in Canada could not come soon enough. Demand has outpaced capacity in many affected countries, including via Ocado’s own website in the UK in mid-March, so this new operation with Sobeys (branded Voilà) will likely be met with an extremely high response rate in Ontario

“Offering home delivery has long been a conundrum for food retailers, with the profitability of the model questioned as online food sales remained a low percentage of total food sales worldwide. However, with 29.2% of global consumers now spending more time shopping for food online* (a habit unlikely to fully reverse post-pandemic), it is now an avenue food retailers cannot ignore.

“For those retailers that can afford it, Ocado’s solution is an increasingly attractive one, offering a “cut and paste” CFC model allowing the partner quick access to growing online demand. And as long as the new operations do not stumble, demand for Ocado’s services will no doubt grow over the next few years as we begin to emerge from the impact of COVID-19.”

*Data sourced from GlobalData’s weekly COVID-19 tracker of over 5,000 consumers across 11 different countries

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